Gulf countries refuse Gaza investment without Palestinian state pathway

6/2/2025 6:04

U.S. President Donald

Trump's vision of a Gaza Strip cleared of its Palestinian

inhabitants and redeveloped into an international beach resort

under U.S. control has revived an idea floated by his son-in-law

Jared Kushner a year ago.

The idea, outlined by Trump in a press conference on Tuesday,

has drawn shocked reactions from both Palestinians and Western

critics who say it would be tantamount to ethnic cleansing and

illegal under international law.



But it was not the first time Trump has spoken of Gaza in

terms of real estate investment opportunities. In October last

year, he told a radio interviewer Gaza could be "better than

Monaco" if rebuilt in the right way.



The idea of a radical redevelopment of Gaza was aired soon

after Israel began its campaign in the narrow coastal enclave

following the Hamas-led attack on Israel on Oct. 7, 2023, most

prominently by Kushner, who as special Middle East envoy in

Trump's first term helped drive the "Abraham Accords"

normalizing relations between Israel and a number of Arab

countries.

"Gaza's waterfront property, it could be very valuable, if

people would focus on building up livelihoods," Kushner, who

once described the entire Arab-Israeli conflict as "nothing more

than a real-estate dispute between Israelis and Palestinians"

said at an event in Harvard in February 2024.



"It's a little bit of an unfortunate situation there, but I

think from Israel's perspective, I would do my best to move the

people out and then clean it up," he said. Kushner was himself a

property developer in New York prior to Trump's first term.



A spokesperson for Kushner did not immediately respond to a

request for comment for this story.



There were also doubts about how literally Trump's proposal

should be understood, given his reputation as a freewheeling

dealmaker used to unsettling his negotiating partners with

attacks from unexpected angles.



Saudi Arabia, the predominant power in the Arab world, "will

not take this statement very seriously," a source close to the

royal court in Riyadh said. "It has not been thought through and

is impossible to implement, so he will eventually realize

that."



In a statement on Wednesday, Saudi Arabia's foreign ministry

said the kingdom rejected any attempt to displace the

Palestinians from their land. Both the Palestinian Authority and

Hamas also condemned the remarks.

Reuters could not establish whether Kushner, whose private

equity firm has taken investments from Gulf countries including

$2 billion from Saudi Arabia, has engaged in any discussions in

the region about Gaza investment.



For Palestinians, however improbable the idea of Gaza as a

waterfront resort may sound, such talk recalls the "Nakba" or

catastrophe after the 1948 war at the start of the state of

Israel, when 700,000 fled or were forced from their homes.



Early on in the war, internet memes showing mocked-up images

of beachside condominiums along the Gaza shoreline were widely

shared on social media, often by pro-Israel posters looking to

mock Palestinians in Gaza, where health officials say 47,000

people have died during Israel's retaliation for the Oct. 7

attacks that killed 1,200 people, according to Israeli tallies.

Israeli politicians have often reproached Palestinian leaders

for focusing on fighting Israel rather than developing a new

Dubai or Singapore in areas like Gaza, which for the past two

decades has been under blockade that severely limits access to

finance and basic materials.

In former years, the coastal enclave was a popular destination

for Israeli tourists and even after the takeover by the Islamist

movement Hamas in 2007, there was a laidback scene of smart

beachside restaurants and cafes along the seafront.

But the practicalities of realizing Trump's vision of creating

"The Riviera of the Middle East" in Gaza, where the Islamist

movement Hamas is still firmly in control and where there has

been a furious reaction to his comments, remain unexplained.



Land ownership in Gaza is covered by complex mix of

regulations and customs drawn from Ottoman, British mandate and

Jordanian laws as well as clan practices, with land title

sometimes backed by documents from previous legal regimes. There

are currently heavy restrictions on foreigners buying land.



For the moment, after 15 months of bombardment, Gaza is a

"demolition site" in Trump's words, that will require 10-15

years of reconstruction, according to his special Middle East

envoy Steve Witkoff, himself a former real-estate developer who

last week became the most senior U.S. official to step foot in

the enclave since the war began.



Estimates of the cost of reconstruction go as high as $100

billion.

However, Gulf countries, a potential source of investment in

rebuilding Gaza, have strongly rejected offering any finance

while a pathway to an independent Palestinian state remains

closed.



For other potential investors, the uncertainties appear to

outweigh any potential benefits, at least for the moment,

according to analysts contacted by Reuters. Many of Israel's

largest construction companies and the builders association

declined to comment.



"Large-scale redevelopment in post-conflict areas generally

requires significant investment, stability, and long-term

planning, but beyond that, it's impossible to assess anything

concrete right now," said Raz Domb, an analyst at Leader Capital

Markets in Tel Aviv, an investment bank.







SETTLEMENTS



One group which has reacted with enthusiasm is Israel's

settler movement, which has long dreamed of returning to

settlements in Gaza that were abandoned 20 years ago under

former Israeli prime Minister Ariel Sharon.



Trump's own administration contains a number of officials

close to the settler movement and although Trump said he did not

see Jewish settlements being rebuilt in Gaza, his comments were

seized on immediately.



Settler groups say their interest in returning to Gaza is

motivated by the Biblical connections they feel with the land

but, for the moment at least, such considerations were secondary

to the prospect of moving out Palestinians.

Last year the Nachala Movement, which promotes Jewish settlement

in the West Bank, helped organize a conference at the edge of

the Gaza Strip called "Preparing to Resettle Gaza", where

politicians in Netanyahu's Likud party and others discussed

plans to "encourage emigration" of Palestinians from Gaza and

rebuild the settlements.



"Assuming Trump's comments about transferring Gazans to

other countries are translated into practice, we must hurry and

establish settlements throughout the Gaza Strip," the group said

on the social media platform X.



"No part of the land of Israel should be left without Jewish

settlement."