In a press conference with Jordanian King Abdullah in February, U.S. President Donald Trump touted his proposal that the United States should seize control of Gaza, empty it of its roughly two million residents, and redevelop the territory as a tourist area, a “Riviera of the Middle East.” Such a plan is a nonstarter among Arab countries. They perceive it as tantamount to accepting the ethnic cleansing of Gaza. Put on the spot, Abdullah demurred and suggested that he awaited an alternative plan for Gaza, one that would be advanced by Egypt.
Although it borders Gaza, Egypt had left the territory to Israel and then Hamas for decades. After all, it still feels the lingering damage of its last attempt to bring peace to the Middle East—the 1978 Camp David accords that ended hostilities between Israel and Egypt. The pact was hailed as a triumph, but it cost Egypt dearly. It led not just to the assassination of Egyptian President Anwar Sadat in 1981 but also to Cairo’s marginalization in the region and its economic dependence on Washington. And it angered people in Egypt and in the broader Middle East, fueling Islamist militancy that has roiled the region for decades.
The war in Gaza, however, offers Egypt a chance to regain the status it once had in the Arab world. On March 4, Egypt unveiled what it described as “a comprehensive vision for rebuilding Gaza while ensuring Palestinians remain on their land.” This reconstruction plan for Gaza was presented in a 112-page prospectus, complete with maps, AI-generated renderings, a phased five-year timeline, and an estimated budget of about $53 billion. It envisions redeveloped infrastructure, housing units for 1.6 million people, a commercial seaport, a technology hub, industrial zones, beach hotels, and an airport. And it insists, contrary to Trump’s claims, that such real estate development in Gaza is feasible without displacing its residents. Indeed, this was the plan’s principal purpose; its political prescriptions are deliberately vague, outlining a technocratic Palestinian interim administration of the territory, assisted by international peacekeepers. In separate meetings in early March, the Arab League and the Organization of Islamic Countries backed the Egyptian plan. And the foreign ministers of France, Germany, Italy, and the United Kingdom commended the plan as “realistic.”
Israel, whose right-wing government seems intent on forcing out the residents of Gaza, rejected the plan immediately. Washington offered mixed messages, with Trump initially dismissing it as unworkable before other administration officials welcomed the initiative. Steve Witkoff, the U.S. special envoy to the Middle East, called the plan “a good-faith first step from the Egyptians,” suggesting that the Arab proposal was not, in fact, dead on arrival. Hurdles certainly remain. Neither Israeli Prime Minister Benjamin Netanyahu nor Trump seems to be in any rush to sort out a long-term political arrangement. But the Egyptians have put an opener on the table, which is more than anyone else could do—and that’s an important move for Cairo.
Just by advancing this peace plan for Gaza, Egypt has salvaged the Palestinian aspiration for statehood from Trump’s desire to conjure a showy real estate development deal. More broadly, Cairo seeks to redeem the vexed legacy of Camp David. In so doing, Egypt may be able to diversify its sources of economic backing as its own economy teeters on the brink of crisis. Success for Cairo depends on its recovering a role that it has not played for decades, that of a regional leader able to drum up support from a wide array of governments with various, often clashing interests. The obstacles to the Egyptian plan are manifold, but Egypt could emerge from the war in Gaza once again as the linchpin of the Middle East.
### THE COSTS OF PEACE
Egypt’s leading role in envisioning Gaza’s postwar future was something of a surprise, a testament in part to its close history with Gaza itself, but, more important, to the exhaustion and trepidation of the other plausible contenders for regional leadership. The last time Egypt advanced a major deal with Israel at the behest of the United States, it did not end well. The U.S.-brokered Camp David peace accords of 1978 won Sadat the Nobel Peace Prize (shared with Israeli Prime Minister Menachem Begin) and brought what the United States and its allies considered admirable stability to Egypt. In most other respects, however, it proved enormously damaging.
Egypt was ostracized in the region. Suspended from the Arab League and reviled by the revolutionary government in Iran, it surrendered its commanding position in the Middle East to a series of aspiring megalomaniacs, including Libya’s Muammar al-Qaddafi and Iraq’s Saddam Hussein, and, today, to ambitious and wealthy Gulf rulers, notably Saudi Crown Prince Mohammed bin Salman, United Arab Emirates President Mohammed bin Zayed, and Qatari Emir Tamim bin Hamad Al Thani. Most economic benefits of the peace accords proved illusory, as the “cold peace” failed to spur trade and ultimately made Egypt deeply dependent on U.S. foreign assistance. In 2024 alone, Egypt received over $1.5 billion from the United States; 80 percent of that funding went to military spending, and the rest, largely administered by the now eviscerated U.S. Agency for International Development, supported programs to do with education, health care, food insecurity, and even the conservation of the antiquities that undergird tourism, an investment intended, as USAID put it several years ago, to “reduce Egypt’s dependency on foreign debt” and back the country’s “journey to self-reliance.”
> Egypt seeks to redeem the vexed legacy of the Camp David accords.
In its decades of dependence, Egypt grew adept at securing resources—budget support and debt relief, development assistance and military aid—by playing a useful role in furthering the interests of the United States and its Western allies in the region. Between 1978 and 2022, the United States provided Egypt with over $50 billion in military and $30 billion in economic assistance. For this, Egypt guaranteed the United States that it would not pose any serious military threat to Israel, it would cooperate on counterterrorism, and it would assist with the complex Libya and Sudan files, along with providing myriad other useful services, including preferential passage in the Suez Canal. But not all the inflows were aid; the upheaval surrounding President Hosni Mubarak’s ouster in 2011 reminded the U.S.-backed international financial institutions that Egypt is “too big to fail.” The country’s external debt ballooned from a little more than $40 billion in 2014, when the current president, General Abdel Fattah el-Sisi, came into office, to well over $160 billion in 2022, with new lines of credit opened with the International Monetary Fund, Saudi Arabia, and the United Arab Emirates. As the COVID pandemic and the war in Ukraine worsened the country’s economic position, Egypt became the IMF’s second-largest client, surpassed only by Argentina.
The perennial deferral of Egypt’s “journey to self-reliance,” to quote the USAID report, was not the only unexpected result of the peace treaty with Israel, however; there were political consequences that continue to resonate today, well after Egypt’s sheepish reintegration into Arab regional politics in the late 1980s. Publics at home and in the region widely saw the Egyptian government as complicit in the failure to secure a just settlement for the Palestinians. This unresolved grievance fueled Islamist opponents of Israel and the United States across the region, including Iran, al-Qaeda, and, of course, Hamas in Gaza. Egypt’s military governments have long been deeply distrustful of Islamist movements, notably the homegrown Egyptian Muslim Brotherhood, and Sisi himself came to power in a military coup against a Muslim Brotherhood president who was elected after the uprising of 2011. Even if the Egyptian president harbors a sentimental attachment to the Palestinian cause, he has no sympathy for Hamas and little apparent regard for the leadership of the Palestinian Authority.
Still, neglect of the Palestinians is politically—and perhaps personally—perilous. It was a member of a radical offshoot of the Brotherhood, Islamic Jihad, who assassinated Sadat in 1981, a mere 18 months after the peace treaty was finally signed. The assassination, during the annual military parade celebrating Egyptian victories at the start of the 1973 Arab-Israeli war, was generally greeted with satisfaction by governments in the Muslim world. Although three U.S. presidents and multiple European heads of state attended the funeral, the only Arab leader there was the president of Sudan. Iran named a street in Tehran after Sadat’s assassin.
### THE EGYPTIAN DEAL
The costs of Sadat’s go-it-alone approach were well-known to Sisi as he devised a plan to extricate Gaza’s residents from their misery without agreeing to American and Israeli proposals to relocate them to other countries—including Egypt itself, which already hosts around 100,000 Gazans who managed to flee the Israeli onslaught after Hamas’s October 7 attacks. In developing its plan, the government of Egypt had three challenges. It had to block Trump’s effort to shift the discussion from negotiations over Palestinian aspirations to haggling over the financing and construction contracts for a real estate development project. Egypt also needed to show that it could be possible to devise an arrangement for the administration of Gaza that reflects the Palestinian quest for statehood. And finally, Egyptian leaders hoped to use the war to secure continued financial inflows that will stave off economic crisis at home, where one in seven people suffer from food insecurity and more than one in five children under five are malnourished and undersized.
All this hinges on Egypt’s ability to take up a role it has not played in decades. It needs to mobilize support from governments in and well beyond the region that have different and often competing interests in their relations with Israel and the United States. Egypt has insisted that even the most ambitious rebuilding project does not require the removal of anyone from Gaza; in this endeavor, Egypt is particularly well equipped to put together financing from a variety of countries, including China, Saudi Arabia, and Turkey, and solicit bids from international firms for the contracts to rebuild the physical infrastructure in Gaza. After all, Sisi has already demonstrated his enthusiasm for such megaprojects in the development of Egypt’s new administrative capital, which is designed to house more than six million residents and cover an area outside Cairo twice the size of the Gaza Strip.
Egyptian leaders cannot be seen as selling out the Palestinians again as they were following the 1978 accords, alone or in concert with allies, however costly that may be. Apart from the principle of supporting Palestinians’ rights to their homeland—widely embraced across the region—Cairo must grapple with more mundane considerations. Sisi knows that swelling the already bloated ranks of Egypt’s poor with Palestinian refugees will not further the country’s “journey to self-reliance.” Wherever they live, Gazans are likely to need substantial and sustained humanitarian assistance. Yet this is a sector already under siege, as suggested by the Trump administration’s dismantling of USAID and Israel’s banning of UNWRA (the UN agency that has provided assistance to Palestinian refugees for 75 years) from operating in the West Bank and Gaza. Moreover, any major influx of refugees from Gaza would inevitably include Hamas supporters. This would risk destabilizing the Egyptian government—as Sadat’s successors understood—and, perhaps even more disconcerting, might provide a rationale for Israeli interventions in Egypt’s internal affairs, whether territorial incursions, as seems to be happening currently in Syria, or through covert operations, such as Israeli intelligence’s high-tech gambit in September 2024 that saw thousands of pagers belonging to operatives of the Shiite militant group Hebzollah explode in Lebanon on a single day.
The Egyptian government will not allow itself to get out ahead of popular opinion or regional allies. Unless other regional players, including the Emiratis, Jordanians, Qataris, and Saudis, are willing to carry the reputational, and possibly financial and governmental, burden of an agreement on the administration of Gaza, no plan is workable. But Egypt is stepping into its old shoes of being a regional coordinator. In convening the only-recently moribund Arab League to discuss its proposals, Egypt and other Arab governments were signaling hopes for a united front, one that would not be broken up by the divide-and-conquer tactics of Israel’s separate peace agreements with Egypt in the 1970s and Jordan in the 1990s—and in the more recent Abraham Accords between Israel and a slew of Arab states. The league’s secretary-general (and erstwhile Egyptian foreign minister) Ahmed Aboul Gheit emphasized that “the Egypt plan is now an Arab plan.”
Breaking the fast during the holy month of Ramadan in Rafah in southern Gaza, March 2025 Hatem Khaled / Reuters
No doubt in part because Israel and the United States were likely to reject any first offer out of hand (as did happen), the plan was relatively light on the specifics of the political administration of Gaza. It proposed an interim Governance Assistance Mission led by Palestinian technocrats and some revived role for the Palestinian Authority, but the details were deliberately vague to allow for future negotiation. As an opening gambit, it appeared to work: Witkoff, the U.S. special envoy to the Middle East, softened Trump’s initial condemnation of the plan, saying that it had “a lot of compelling features.”
Witkoff and the Trump administration will have to persuade Israel of the merits of compromise with its Arab neighbors. As much as Trump seems willing to give Netanyahu a free hand in Gaza and eager to turn the strip into a glitzy “Riviera,” the president also has interests in cordial, perhaps even lucrative, relations with other countries in the region, including the parties to the Abraham Accords, for whom Israel’s invasion of Gaza and attacks in Lebanon and Syria have been galling and embarrassing distractions. Israel has said that it will not compensate Palestinians or help pay to fix the damage it inflicted in Gaza, but the Israeli government may have to concede more political autonomy and a longer timeline—if not a permanent arrangement—than they wish to those who will be paying for reconstruction.
And who will foot the bill? This may be an opportunity for Egypt to address another of its challenges and diversify its portfolio of patrons away from the dependence on the crisis rents that have served to keep it (and Jordan) tethered to American support. Trump has made plain that he is not keen on bankrolling Egypt indefinitely and wants to abbreviate the country’s elusive “journey to self-reliance.” Asked whether he would deny aid to Egypt and Jordan if they didn’t take in Gazans, Trumps said, “Yeah, maybe, sure, why not? If they don’t, I would conceivably withhold aid, yes.” Although his administration has since backpedaled from that threat, the evisceration of USAID has already imperiled important civilian programs in both Jordan and Egypt.
Obviously, the wealthy countries of the Gulf will play a major role in developing the financing for Gaza’s reconstruction—and Egypt is likely to demand a percentage of that funding for serving as general contractor. In endorsing the plan, the 57-member Organization of the Islamic Conference called on “the international community and international and regional funding institutions to swiftly provide the necessary support for the plan.” Indeed, even the Israeli opposition leader and former prime minister Yair Lapid proposed that Egypt might be compensated for playing an administrative role in Gaza in exchange for international relief of its foreign debt obligations. And, not to be forgotten, China’s influence in Egypt has grown measurably in the last decade—Sisi has made more than twice as many visits to Beijing than to Washington during his time in office—and 2024 was celebrated as the “Year of Egyptian-Chinese Partnership” by the two countries. The Chinese foreign minister, Wang Yi, endorsed the Egyptian proposal, saying that “all parties in the Middle East must overcome differences to support the establishment of the Palestinian state,” while external powers should promote peace between the Palestinians and the Israelis.
In assuming the role of architect and engineer of a resolution of the plight of the Gazans, Egypt builds on the long and often trying experience of abiding by its peace treaty with Israel. As Sisi repeatedly observed after the plan was unveiled, “The Egypt that pioneered peace in our region some 50 years ago … only knows the kind of peace that’s based on right and justice and safeguards the land and sovereignty.” The next move is Israel’s. Gaza can be more than a ruined territory, home to a dispossessed people ruled by Israel in perpetuity. Egypt is poised to devote its substantial convening power, expertise, and skill to realizing a just and sustainable future for the territory, its people, and the broader region.