Publication
Omar Shaban Ismail · PalThink for Strategic Studies · 2026
After 34 plans for rebuilding Gaza, the question that precedes all of them remains open: who pays, who decides, and who guarantees that what is built will not be destroyed again? Omar Shaban reads the $71.4 billion bill estimated by the EU, the UN and the World Bank against the $17 billion pledged in Washington, of which about one percent has actually been transferred, and shows how money has become hostage to politics and security, why the Gulf cannot be the sole financier, and why investors fear not Gaza but the next war. He then proposes a single financing architecture built on five elements: a unified Palestinian authority, a multilateral international fund, an independent oversight mechanism, an international war-risk guarantee system, and a political and security agreement that protects projects from repeated destruction.
A $71.4bn bill, $17bn pledged and 1% transferred: why no plan has answered who will finance Gaza’s reconstruction, and the five-part architecture it needs.
There are dozens of plans for rebuilding Gaza. But the problem is not a lack of plans. The problem is that none has answered the question that comes before everything else: Who will pay? Who will decide where the money is spent? Who will guarantee that the projects financed by the world will not be destroyed again? And who will bear the losses if another war breaks out?
These are not secondary financial questions. They are at the heart of the dilemma facing the reconstruction of Gaza.
Since October 2023, dozens of initiatives have accumulated around the future of the Strip, ranging from detailed urban plans to recovery and reconstruction frameworks, investment proposals, and governance arrangements. A review by the Portland Trust in May 2026 identified 34 such documents. The Palestine Economic Policy Research Institute (MAS) reviewed 11 plans from a spatial-planning perspective, while a later study by MAS and the Palestinian Trade Center, commissioned by Oxfam, examined many plans. These plans differ in their visions for the city, the economy, governance, the entity responsible for implementation, and the political horizon. But they share one fundamental gap: there is still no viable financing architecture that connects money with politics, security, and governance.
That gap has become even more serious in 2026 than it was after previous wars in Gaza.
A Bill Too Large for Any Single Donor
The final joint damage and needs assessment, issued by the European Union, the United Nations, and the World Bank on April 20, 2026, estimated Gaza’s physical damage at approximately $35.2 billion, with economic and social losses of around $22.7 billion. Recovery and reconstruction needs were estimated at $71.4 billion over ten years, including $26.3 billion during the first 18 months.
This is not a conventional reconstruction bill. It is the cost of rebuilding an economy, a society, and infrastructure devastated on an exceptional scale.
But even this figure should not give the impression that Gaza has actually entered a reconstruction phase. More than 371,000 housing units have been damaged or destroyed, more than half of the hospitals are out of service, and the economy has contracted by 84 percent. At the same time, the security and geographical situation remains fluid, while the movement of people, materials, and equipment continues to depend on military and political arrangements. That is why the statement by Nikolay Mladenov, the High Representative of the Gaza Peace Council, on September 7, 2026, that the parties remain “very far” from beginning reconstruction is not merely an administrative detail. It reflects a fundamental reality: Gaza remains in a phase of relief and early recovery, while the financial debate is proceeding as though the war were already over.
Pledges Are Not Funding
Even when money is announced, that does not mean it has become available.
In February 2026, the first meeting of the Peace Council in Washington announced $17 billion in pledges, including $10 billion from the United States and $7 billion from nine countries, including the United Arab Emirates, Qatar, Saudi Arabia, and Kuwait. But three months later, only around one percent of those pledges had actually been transferred, according to officials familiar with the matter. The Peace Council was forced to urge pledged countries to make their payments, while some countries made clear that their contributions would be paid over several years.
A financial pledge is a political decision. Transferring the money is a financial, administrative, and security decision.
Even if the full $17 billion were converted into deployable funds, it would cover only about a quarter of the estimated needs. The amount actually disbursed represents only a marginal fraction of what is required.
And this is not merely a liquidity problem. It is a trust problem.
The donor wants to know who will manage the money. The investor wants to know who will protect its assets. The financial institution wants to know who will guarantee the loan.
And all of them want an answer to the question that no financial framework alone can answer:
What happens if the war returns?
Money and international finance is a Hostage to Politics, security and priorities
There are legitimate financial conditions that Palestinians should not fear: independent auditing, transparency, competitive procurement, anti-corruption measures, and the publication of financial data.
Indeed, Palestinians themselves have a direct interest in such safeguards.
But something else happens when financing conditions become conditions that determine the shape of political authority, the rights of beneficiaries, or the future of Palestinian sovereignty.
The current process links reconstruction to complex security and political arrangements. Israel links reconstruction to the disarmament of Hamas, while Hamas links disarmament to arrangements concerning Israeli withdrawal and security.
Caught between the two, the financier is unable to determine when a pledge can actually become a project.
Money has therefore become hostage to the current political situation.
The problem becomes even more complicated when financial contributions themselves become an entry point into decision-making arrangements.
If permanent membership in the Peace Council is tied to a large financial contribution, then the question is no longer simply: Who pays?
It becomes:
Does financing buy influence over governance?
That question must be taken seriously because it concerns the nature of the system that will govern reconstruction, not merely its sources of funding.
Palestinian Money Is Not a Grant
This confusion is particularly clear in the issue of Palestinian clearance revenues.
If billions of dollars in withheld Palestinian tax revenues are released and used for the reconstruction of Gaza, the legal and political question is not simply how the money will be spent.
The first question is:
Who owns this money in the first place?
Transferring public Palestinian revenues from the Palestinian Authority to an external framework and then using them as part of reconstruction financing could, intentionally or unintentionally, turn a sovereign Palestinian resource into a conditional grant.
That is a fundamental distinction.
The reconstruction of Gaza should not become a process in which Palestinians lose control over their own money and assets in the name of protecting the financing.
Investors Do Not Fear Gaza; They Fear the Next War
Perhaps this is the most overlooked part of the debate.
The problem is not that Gaza lacks investment opportunities. After such massive destruction, there is enormous demand for housing, energy, water, telecommunications, transportation, services, and industry.
The problem is that an investor cannot price an asset if they do not know whether it will still exist.
Financial institutions can price market risk, exchange-rate risk, credit risk, and even some forms of political risk.
But how do you price the possibility that a power plant, factory, or port will be destroyed in the next war?
This is where traditional financial instruments begin to fail.
That is why reconstruction needs more than capital. It needs guaranteed capital.
The required system could include political-risk guarantees, war-risk insurance, loss-sharing mechanisms, a pre-funded compensation facility, and multilateral guarantees for strategic projects.
But even the best guarantee mechanisms will not work without an entity willing to bear the cost if destruction occurs.
And so we return to the first question:
Who guarantees that the war will not happen again?
The Gulf Cannot Be the Sole Financier
For years, many reconstruction scenarios rested on an implicit assumption that Gulf states would shoulder the largest share of the reconstruction bill.
But the environment in which this assumption is expected to operate has changed.
The region itself faces growing security and economic needs. Regional war, attacks on energy infrastructure, rising defense spending, and slower growth are all reshaping the priorities of Gulf states.
It is true that Gulf sovereign wealth funds manage enormous assets, estimated in the trillions of dollars.
But the size of these assets does not equal the amount of money available for rebuilding Gaza.
These funds face domestic commitments, economic-diversification projects, and growing defense and security needs.
At the same time, Gaza is competing with other major reconstruction demands.
Ukraine’s reconstruction needs are estimated in the hundreds of billions of dollars. Syria requires more than $200 billion according to World Bank estimates. Meanwhile, countries across the region are themselves facing growing costs as a result of wars and crises.
Gaza is now competing for reconstruction financing in a region that itself needs to rebuild.
Gaza can no longer be viewed as standing before an open-ended Gulf financial reservoir.
What Can Gaza Offer Investors?
This is where the debate needs to move from requesting financing to designing investment.
Gaza cannot compete with Ukraine in scale, nor can it be compared with Syria in terms of territory and resources.
But it can offer something else: an integrated project to rebuild a viable Palestinian economy, provided the necessary political and security environment exists.
Such a project could include:
• Rebuilding basic infrastructure.
• Developing energy and water systems.
• Establishing logistics and trade networks.
• Rebuilding housing on the basis of clear property rights.
• Investing in education, healthcare, and technology.
• Economically connecting Gaza with the West Bank and regional markets.
But this requires Palestinians themselves to offer financiers four things:
Unity, legitimacy, transparency, and the capacity to implement.
It is not enough for the Palestinian Authority or any Palestinian body to say: “Fund us.”
It needs to say:
“This is the system that will protect your money. This is the entity that will manage it. These are the procurement rules. These are the property rights. These are the oversight mechanisms. And these are the safeguards that will prevent reconstruction from becoming a political instrument.”
Reconstruction Cannot Be Separated from Statehood
Ultimately, a sustainable economy cannot be built in Gaza without resolving the question of governance.
The donor wants a clear authority.
The investor wants a clear legal system.
The bank wants a clearly identified borrower and repayment mechanism.
The citizen wants to know who owns the land and who guarantees their rights.
That is why ending the Palestinian political divide, unifying the political and administrative authority across Gaza, the West Bank, and East Jerusalem, rebuilding institutions, and establishing a clear electoral path are not political issues separate from reconstruction.
They are part of the financial infrastructure of reconstruction.
Financing does not operate in a political vacuum.
What Should Happen Now?
If the problem is not the absence of plans, then the response should not be to produce another plan.
What is needed is a single national and international financing architecture built around five elements:
1. A unified Palestinian authority responsible for negotiations and for setting priorities.
2. A multilateral international fund combining grants, concessional loans, and private investment.
3. An independent transparency and oversight mechanism allowing both financiers and Palestinians to monitor funds and projects continuously.
4. An international war-risk guarantee system protecting investments and assets financed by the international community.
5. A clear political and security agreement guaranteeing access, the entry of materials and equipment, and protection of projects from repeated destruction.
These are not bureaucratic conditions.
They are the minimum requirements for making financing sustainable.
The Question That Must Come Before Reconstruction
After all these plans, the real question remains unanswered:
Who will finance the reconstruction of Gaza?
But perhaps the question itself needs to be reframed.
The more important question is:
What would make financing Gaza a rational decision for donors and investors?
The $71.4 billion will not come from a single source, nor will it arrive in the form of one check.
If it comes, it will come through a combination of Arab and international grants, concessional financing, guarantees, private investment, insurance mechanisms, and risk-sharing arrangements.
But large-scale financing will not materialize unless the equation governing its risks changes.
We cannot ask donors to rebuild what may be destroyed again.
We cannot ask investors to bear risks that cannot be priced.
We cannot ask Palestinians to accept arrangements that deprive them of control over their own money and assets.
And we cannot build a sustainable economy under permanent political division.
Therefore, the first strategic project for rebuilding Gaza is not housing, roads, or a port.
It is building a system that makes reconstruction protectable and sustainable.
The problem, then, is not that the world lacks the money.
The problem is that the world does not yet have the political and security guarantee that would make spending money in Gaza an investment in the future rather than a down payment on the next war.
Topic: Gaza Reconstruction — reconstruction financing · donor pledges · Gaza Peace Council · clearance revenues · war-risk guarantees · Gulf states · political division — Original source