Efforts to mobilize large-scale international funding for Gaza’s reconstruction have stalled as donors grow increasingly wary of underwriting a plan that lacks clarity on security, governance, and the future of armed groups in the territory. While diplomatic momentum has been claimed around ceasefire arrangements and border access, the deeper political and military questions that underpin reconstruction have remained unresolved. As a result, financial commitments that were expected to follow the end of major hostilities have yet to materialize.

At the heart of donor reluctance lies a fundamental concern: without credible progress toward Hamas disarmament or demilitarisation, any reconstruction effort risks being temporary, vulnerable to renewed conflict, and politically indefensible at home. For governments and private investors alike, the absence of a clear security pathway has transformed Gaza’s rebuilding from a humanitarian imperative into a high-risk geopolitical gamble.

The Security Precondition Shaping Donor Calculations

International donors have repeatedly signaled that reconstruction funding cannot be detached from security guarantees. The logic is not merely political but financial. Infrastructure projects, housing, utilities, and industrial zones require long-term stability to justify their cost. In Gaza’s case, donors fear that funds could be destroyed or rendered unusable if fighting resumes.

The U.S.-led reconstruction framework places Hamas disarmament at the center of this security equation. The proposal envisions a phased Israeli military withdrawal tied to the dismantling of Hamas’s armed capabilities, followed by civilian reconstruction overseen by a new governing structure. Yet while the framework outlines broad principles, it offers few operational details on how disarmament would be negotiated, verified, or enforced.

This ambiguity has proven decisive. Donors are reluctant to commit billions of dollars based on political assumptions rather than concrete mechanisms. Without visible steps toward disarmament, the risk profile of Gaza remains closer to an active conflict zone than a post-war reconstruction site.

Disarmament as a Political Impasse, Not a Technical One

Hamas disarmament is not simply a technical challenge but a deeply political one. The group retains organizational cohesion, local influence, and an armed presence across significant parts of Gaza. While weakened by prolonged conflict, it continues to assert control over territory and security on the ground.

From Hamas’s perspective, laying down arms without guarantees over political inclusion, security arrangements, or the end of external military pressure is seen as existentially dangerous. From Israel’s perspective, partial or symbolic disarmament is insufficient, and military leaders have repeatedly expressed skepticism that Hamas would relinquish its weapons voluntarily.

This mutual distrust has frozen progress. Mediators have floated the idea of phased or conditional disarmament involving other Palestinian factions, but no detailed roadmap has been accepted by all sides. For donors observing from a distance, the absence of a credible process signals that reconstruction could proceed in parallel with renewed violence rather than after its resolution.

Why Donors Question the Governance Structure

Beyond security, donors have raised concerns about how reconstruction funds would be governed. The proposed oversight mechanism, led by a U.S.-chaired board, represents a departure from past reconstruction models that relied heavily on multilateral institutions. While proponents argue this structure would accelerate decision-making and attract private capital, critics worry about transparency, legitimacy, and accountability.

Several potential donors prefer that funds be channeled through established international bodies with experience operating in fragile environments. These institutions offer standardized procurement rules, auditing mechanisms, and political insulation. In contrast, a newly created governance body must still prove its ability to manage funds impartially and effectively in one of the world’s most politically sensitive contexts.

This disagreement has compounded funding delays. Donors are not only waiting for security progress but also for clarity on who will control spending decisions, how corruption risks will be mitigated, and how local Palestinian institutions will be involved.

The Scale of Reconstruction Raises the Stakes

The estimated cost of rebuilding Gaza runs into the tens of billions of dollars, reflecting the scale of destruction to housing, utilities, transport networks, and public services. Such sums require not just government aid but also private sector participation, long-term financing, and insurance coverage.

Private investors, however, are especially sensitive to security risk. Unlike humanitarian donors, they must price projects based on expected returns and the probability of disruption. In Gaza’s case, the lack of demilitarisation makes standard financing models unworkable. Insurance premiums soar, lending costs rise, and many projects become financially nonviable.

Some planners have floated the idea of “security-tiered” investment, where lower-risk zones receive funding first while more volatile areas are deferred. Yet even this approach depends on credible enforcement of security arrangements, something that remains elusive.

Regional Politics and Conditional Support

Wealthy regional states that could play a decisive role in funding reconstruction have adopted a cautious stance. Their hesitation reflects not only security concerns but also broader political calculations. Many are unwilling to bankroll rebuilding without a comprehensive political settlement that addresses governance, borders, and Palestinian representation.

These states have learned from past reconstruction cycles in Gaza, where infrastructure built after one conflict was destroyed in the next. Without a durable political framework, they fear repeating a costly and futile cycle that yields little strategic or humanitarian return.

Domestic considerations also matter. Public opinion across the region increasingly questions open-ended financial commitments without visible progress toward peace or accountability.

Humanitarian Consequences of the Funding Freeze

While diplomatic and financial debates continue, the humanitarian situation in Gaza remains dire. Vast quantities of rubble block roads and neighborhoods, preventing even basic recovery efforts. Water, electricity, and sanitation systems operate at a fraction of capacity, undermining public health and economic activity.

Clearing debris is often cited as the first practical step toward reconstruction, yet even this requires funding, security coordination, and governance approval. Without initial capital injections, the physical and psychological recovery of Gaza’s population remains stalled.

The funding delay also feeds instability. Economic stagnation and unemployment can reinforce cycles of violence, making the very security donors seek even harder to achieve. This creates a paradox: donors wait for stability to fund reconstruction, while the absence of reconstruction undermines stability.

Why the Current Moment Feels Different to Donors

Despite these challenges, donors are not rejecting reconstruction outright. Rather, they are signaling that the conditions for sustainable investment have not yet been met. What differentiates the current moment from previous post-conflict pledges is the emphasis on sequencing and verification.

Donors increasingly demand evidence of irreversible steps toward demilitarisation and political transition before releasing large sums. Symbolic commitments or verbal assurances are no longer sufficient. This reflects broader changes in international aid philosophy, where accountability and risk management have taken precedence over rapid disbursement.

In Gaza’s case, that shift has collided with an unresolved conflict dynamic, leaving reconstruction plans suspended between ambition and reality.

The reluctance to fund Gaza’s rebuilding is less about donor fatigue than about unresolved fundamentals. Without agreement on security, governance, and political authority, reconstruction remains an exercise in abstraction rather than implementation.

For now, the U.S.-led plan exists largely on paper, supported by conceptual designs and preliminary discussions but lacking the political breakthroughs needed to unlock financing. Until the disarmament question moves from rhetoric to process, and from process to progress, donors are likely to remain on the sidelines.

Gaza’s future, in this sense, is being shaped as much by what has not happened as by what has. The absence of trust—between combatants, between donors and planners, and between political visions—has become the most powerful constraint on rebuilding a territory in urgent need of it.

(Adapted from Reuters.com)

Categories: Geopolitics, Strategy