Washington explores using withheld revenues to rebuild Gaza while demanding reforms and Hamas disarmament.
The United States is reportedly examining a proposal that would ask Israel to redirect part of the tax revenues it has withheld from the Palestinian Authority toward President Donald Trump’s Board of Peace.
According to the report, the funds would support Washington’s post-war reconstruction and stabilization blueprint for the Gaza Strip. The plan is designed to unlock frozen money for practical rebuilding while keeping strict conditions on any future transfer of funds to Ramallah.
The revenues come from customs duties and import taxes collected by Israel on behalf of the Palestinian Authority under long-standing economic arrangements. Israel has repeatedly frozen these transfers because of the PA’s continued payment system for imprisoned terrorists and their families, widely known as “pay-to-slay.”
Although the Palestinian Authority claimed in February 2025 that it had modified its welfare structure, both Israel and the United States have viewed the changes as inadequate. PA officials estimate that the withheld amount has reached about $50 million.
The proposal would reportedly direct part of the money to a US-backed transitional administration in Gaza, while the remaining funds could be released to the PA only if serious institutional reforms are implemented. Such a move would weaken Ramallah’s political leverage, especially since the PA has not controlled Gaza since Hamas violently seized the territory in 2007.
A Board of Peace official did not directly confirm whether the tax redirection plan is under active discussion, but stressed that every available regional resource must be mobilized to support the President’s $70 billion stabilization plan.
The broader American plan still faces major obstacles, led by Hamas’s refusal to disarm and continued security challenges around the ceasefire framework. Under Trump’s vision, Gaza would eventually be administered by a Palestinian technocratic body only after terrorist factions fully surrender their weapons.
Board of Peace envoy Nickolay Mladenov said planning for Gaza’s rehabilitation is moving forward sector by sector, with costs being assessed and donors being coordinated so reconstruction can begin once conditions permit.
