IMAGE: Bloomberg/Getty Images
As diplomatic spectacles go, few have been more surreal. On September 29th, flanked by Donald Trump at the White House, Benjamin Netanyahu endorsed a peace plan for Gaza that proposes a ceasefire and an international administration of the strip led by Trump himself. It would see Hamas disarmed, Gaza rebuilt with foreign aid and eventually governed by a reformed Palestinian Authority—an outcome long shunned by Israel’s hard right and still opposed by much of Netanyahu’s own coalition. That the Israeli prime minister said yes may reflect not a change in policy, but a calculated political risk.
The plan comes after nearly two years of devastating conflict in Gaza, triggered by Hamas’s surprise attack on October 7th 2023. Since then more than 60,000 Palestinians have been killed, according to UN agencies; the enclave’s economy and infrastructure have been reduced to rubble. For Israel, the cost has also been steep: over 800 soldiers dead, increasing international isolation and mounting internal strain. Entire battalions have rotated through southern Gaza multiple times, including in Khan Younis and Rafah, areas previously declared “cleared”. Yet Hamas’s fighters still operate from a dense web of tunnels and urban ruins.
The military campaign has reached a point of diminishing returns. Each additional month of operations yields less strategic gain and more diplomatic friction.
Trump’s plan, styled as a “Peace to Prosperity 2.0”, mirrors his first stab at Middle East diplomacy in 2020. This time, however, the plan is more audacious. It would see Trump chair a “Board of Peace”, joined by international figures such as Tony Blair, to oversee Gaza’s administration by a “technocratic, apolitical Palestinian committee”. The Palestinian Authority would be allowed to return, but only after completing an externally monitored “reform programme”. In exchange, Israel would release hostages and Palestinian prisoners; allow a surge of aid; and agree to eventual demilitarisation and redevelopment.
Crucially, Hamas would be given a choice: disarm and accept amnesty, or face continued Israeli assault with America’s “full backing”. No one expects the group to agree, but the framing allows Netanyahu to claim magnanimity while preserving freedom of action. The fine print also states that Israel will retain security control of Gaza’s perimeter “for the foreseeable future”, a caveat wide enough to drive an armoured brigade through.
Whether any of this will happen is unclear. Hamas has said it will review the plan, but remains publicly non-committal. Qatar and Egypt, key mediators, are signalling cautious interest. European leaders offered qualified support. Arab states, particularly Saudi Arabia, welcomed the proposal’s return to a two-state framework, but stopped short of endorsing Israel’s continued military role.
The domestic picture is trickier. Netanyahu’s far-right coalition partners have already rejected the plan outright. Finance Minister Bezalel Smotrich called it a “capitulation to terror” and warned it could bring down the government. National Security Minister Itamar Ben-Gvir has threatened to withdraw support unless the war continues until “total victory”. If either follows through, Netanyahu’s fragile coalition could collapse, triggering early elections that polls suggest he would lose.
The prime minister may believe that embracing a Trump-led plan buys him time. It allows him to appear pragmatic abroad while avoiding substantive concessions at home.
The economic angle is where the plan is most conventional. Gaza would be flooded with aid, overseen by international donors and contractors. A “Trump economic development panel” would draw up projects for housing, power, water and transport.
This presumes that aid money arrives. Gulf donors have grown wary of funding reconstruction that may be bombed again within months. European governments face their own fiscal constraints. The US Congress is unlikely to authorise large-scale spending for a region most members can barely place on a map.
The Trump plan relies on a series of sequential “if-then” conditions: if Hamas disarms, if the PA reforms, if donors fund, if Israel restrains itself. The risk is that each link in the chain depends on the others and that none is robust.
Still, Netanyahu’s endorsement marks a big shift. He has resisted US-led peace plans for most of his political career. Now under siege from both international and domestic allies, he has accepted one. It is too soon to call it a breakthrough. But it may be the clearest sign yet that Israel’s war in Gaza, like its prime minister’s grip on power, is entering its final phase. ■
