- A new U.S. proposal, delivered through back channels, offers a hostage exchange and immediate ceasefire.
- The plan is intertwined with controversial long-term redevelopment ideas for Gaza that face widespread regional opposition.
- The initiative comes as Israel, with U.S. support, launches a major ground offensive in Gaza City.
Donald Trump, with special envoy Steve Witkoff, has presented a new Gaza peace proposal to Arab leaders, according to people familiar with the matter. The plan, delivered through back channels to Hamas, centers on an immediate ceasefire and a significant hostage exchange, but is coupled with a long-term vision for Gaza's redevelopment that is already facing stiff resistance.
The immediate proposal offers the release of all 48 remaining hostages held by Hamas in exchange for 2,500 to 3,000 Palestinian detainees in Israeli prisons. A positive response from Hamas would trigger U.S.-brokered negotiations aimed at ending the war, the people said. However, the plan also carries an implicit threat: refusal could lead to an escalation of the ongoing Israeli military operation in Gaza City, an offensive that is already underway with U.S. logistical and intelligence support.
Parallel to the ceasefire efforts, Trump and Witkoff, a real estate executive with no formal diplomatic background, have advanced a separate, more controversial redevelopment plan in high-level meetings with Israeli officials and Middle East envoys. This vision, which some officials have privately described as a real estate-driven approach to foreign policy, proposes reconstructing Gaza as an economic hub, potentially requiring the displacement of a significant number of current Gazan residents. The "Gaza Humanitarian Foundation," an entity with close ties to the White House, is reportedly involved in these discussions.
The economic scale of the proposed reconstruction is vast, with estimates running into the tens of billions of dollars for debris removal and rebuilding. Funding mechanisms remain unclear and highly contentious. One proposal under discussion involves using $30 billion in frozen Libyan funds as a bargaining tool to facilitate the relocation of civilians, a idea that has been met with deep skepticism from regional actors.
Arab leaders, including key U.S. partners, have universally condemned the displacement component of the plan, viewing it as a form of forced population transfer that violates international norms. The Biden administration, European allies, and the United Nations have not endorsed the Trump-Witkoff approach, instead calling for solutions grounded in international law. Attempts to reach a spokesperson for Witkoff for comment were unsuccessful.
The plan's presentation comes at a moment of intense military activity, underscoring the high-stakes nature of the diplomacy. With negotiations fragile and military operations intensifying, the immediate future hinges on Hamas's response to the hostage-ceasefire offer. Analysts suggest that while a temporary reduction in violence is possible if a deal is struck, the broader, more ambitious redevelopment vision faces near-insurmountable political and humanitarian hurdles.