Gaza 2026: Ceasefire Phasing, Damage Accounting, and the Donor Architecture That Refuses to Form

The damage ledger and the casualty accounting #

The Gaza Ministry of Health, the source most cited by UN OCHA and by the World Health Organization for cumulative casualty totals, reported 50,021 Palestinians killed in Gaza between 7 October 2023 and the March 2025 reporting cut, with a further 113,000 wounded. The figure is consistent within an order of magnitude with the Lancet correspondence of July 2024, which estimated indirect mortality including disease, malnutrition, and untreated chronic conditions at a multiple of the direct count. The Israeli side counts 1,200 killed and roughly 250 taken hostage on 7 October 2023, the largest single-day Israeli civilian death toll since 1948, and 405 IDF personnel killed in Gaza ground operations through end 2024 according to IDF spokesman releases. The hostage population at the start of Phase 1 ceasefire negotiations stood at approximately 98 individuals, of whom an estimated one third were assessed by Israeli authorities to be no longer alive.

Physical damage assessment converges across three independent methodologies. UNOSAT satellite analysis, using Sentinel-1 and WorldView imagery, identified 69.4 percent of structures in Gaza as damaged or destroyed in its January 2025 update, with destruction concentration in northern Gaza, Khan Younis, and Rafah governorates. The World Bank, UN, and EU interim damage assessment of February 2025 priced direct physical damage at 18.5 billion dollars on a Q4 2024 cut, against pre-war Gaza GDP near 2.5 billion dollars in 2022 nominal terms. UN OCHA tracked internal displacement at 1.9 million people, approximately 88 percent of the strip's 2.2 million pre-war population, with most cohorts having moved between three and seven times across the eighteen-month war.

Phase 1 of the ceasefire: 19 January to 1 March 2025 #

The Phase 1 framework, agreed in Doha on 15 January 2025 and effective from 19 January 2025, was negotiated by Qatari, Egyptian, and United States mediators across roughly fourteen months of intermittent talks that began under the Biden administration and closed in the transition window before President Trump's 20 January 2025 inauguration. The structure ran 42 days, with three principal mechanics: a staged release of 33 Israeli hostages from Gaza, including women, elderly, and wounded categories, against the release of approximately 1,900 Palestinian prisoners from Israeli detention, including roughly 290 serving life sentences; an authorized humanitarian flow of up to 600 trucks per day through Kerem Shalom and Rafah-adjacent routes; and a partial Israeli redeployment from population centers and from the Netzarim corridor that bisected the strip during the ground campaign.

Execution through Phase 1 was uneven but largely held. Hostage releases ran on weekly waves through January and February 2025, with a small number of breakdowns over identification of bodies, the release sequence of named individuals, and Israeli scrutiny of crowds during transfers. Aid throughput peaked near the 600-truck-per-day target in early February before falling back below 400 trucks per day on coordination disputes at the crossings, fuel availability, and security incidents on internal distribution routes. The displaced population began returning to northern Gaza in late January 2025 in numbers UN OCHA estimated at 376,000 in the first ten days of the corridor opening, against highly degraded shelter, water, and electricity baselines.

The political brittleness of Phase 1 was visible from the start. The Israeli coalition's right flank, including National Security Minister Itamar Ben-Gvir, withdrew from the government on 19 January 2025 in protest, while Finance Minister Bezalel Smotrich conditioned his continued support on a return to combat at the end of Phase 1. On the Palestinian side, the Hamas leadership inside Gaza had been substantially disrupted: Yahya Sinwar, killed by IDF forces on 16 October 2024 in Rafah, was succeeded by his brother Mohammed Sinwar, who was reported killed in May 2025; the political bureau in Doha and the new Gaza command operated under degraded communications with depleted mid-tier military cadres.

Phase 2 collapse, the March blockade, and the April ground reset #

Phase 2 negotiations were scheduled to begin on 4 February 2025 and to produce a permanent ceasefire framework, full hostage release, and a defined Israeli withdrawal in advance of the Phase 1 expiration on 1 March 2025. The substantive talks did not begin in earnest until 19 February 2025, ran for roughly two weeks in Cairo and Doha, and produced no convergence on the three core questions: the disposition of remaining hostages and bodies, the future of Hamas as an organization in Gaza, and the security architecture inside the strip after Israeli withdrawal. On 2 March 2025 the framework was formally allowed to lapse without a Phase 2 agreement, and on 18 March 2025 Israel reimposed the comprehensive blockade on goods and fuel into Gaza for the first time since the Phase 1 corridor opening.

Ground operations resumed on a phased basis from 2 April 2025, with the IDF moving back into Rafah, the Netzarim corridor, and selected northern Gaza zones under a stated objective of completing the dismantlement of remaining Hamas military formations and pressuring the release of remaining hostages. Civilian casualties in the April to September 2025 window, as reported by the Gaza Ministry of Health and corroborated by ICRC and OHCHR field reporting, ran at a tempo lower than the November 2023 to April 2024 peak but higher than the steady-state of late 2024, with cumulative additional Palestinian deaths in the second campaign estimated by UN OCHA in the 4,000 to 6,000 range across that window. A revised ceasefire arrangement was concluded in Q1 2026, structurally similar to Phase 1 in mechanics, and hostage release and aid throughput data through April 2026 indicate execution closer to the announced parameters than the Phase 2 attempt achieved.

The Trump Gaza takeover proposal and the Arab counterproposal #

On 4 February 2025, in a White House press appearance with Prime Minister Netanyahu, President Trump proposed that the United States take over Gaza, that the Palestinian population be relocated to Egypt, Jordan, and other regional states, and that the territory be redeveloped as what the President termed the Riviera of the Middle East. The proposal, which the President repeated and modulated through February and March 2025, was rejected publicly within 72 hours by Egypt, Jordan, Saudi Arabia, the United Arab Emirates, and the Palestinian Authority, and was opposed by every Arab League foreign minister at the 12 February 2025 emergency consultation in Cairo. Reuters and Al Jazeera reporting through that window indicated that the operational departments inside the US administration, including the State Department Bureau of Near Eastern Affairs and USAID, had not been consulted in advance of the announcement, and that the Israeli government's own coordination with the proposal was confined to the political level.

The Arab counterproposal, endorsed at the Cairo emergency Arab summit on 4 March 2025 and presented under Egyptian chairmanship, priced reconstruction at 53 billion dollars over five years and ran on three conditional pillars: no displacement of the Palestinian population from Gaza, an interim technocratic governance committee under nominal Palestinian Authority oversight, and a phased security transition involving an Arab-led international mission with United Nations Security Council authorization. Gulf Cooperation Council states signaled at the summit that they would carry roughly 25 percent of the headline figure, with the European Union and other multilateral and bilateral donors expected to fund the balance. The United States rejected the framework on 5 March 2025, citing both the Palestinian Authority governance role and the pace of disbursement conditionality.

Two structural facts shape the gap between the headline numbers and the actual disbursement path. The first is that the Egyptian-led plan presupposes a Palestinian Authority reform package that the PA itself has not delivered, and that has been a Saudi precondition for normalization with Israel since the September 2023 framework discussions; absent reform, the technocratic interim governance lacks credible Palestinian consent. The second is that the Israeli coalition has not endorsed any Palestinian governance role in post-war Gaza, has continued to reject the two-state framework as a basis for settlement, and has linked any reconstruction phasing to the dismantlement of Hamas as a political organization, a condition that none of the Arab plan participants have committed to enforce. The result is that the ceiling is real, the rejection of displacement is real, and the architecture for actually moving funds into the strip is not.

Donor architecture: the GCC core, the EU pillar, and the World Bank role #

The donor architecture for Gaza reconstruction is in the same place it was for the 2014 reconstruction conference: a Gulf-Cooperation-Council core willing to fund within a framework that does not legitimize the existing political order, a European Union pillar willing to fund through Palestinian Authority and UN channels, a World Bank technical role through the Multi-Donor Trust Fund and the Partnership for Infrastructure Development Multi-Donor Trust Fund, and a United States position that has shifted from anchor donor under the Biden administration to active opposition to the Egyptian framework under the Trump administration. The 6 billion dollars in firm commitments through April 2026 includes Gulf pledges from Saudi Arabia, the United Arab Emirates, and Qatar in roughly equal proportions, EU and member state commitments principally through the Pegase mechanism, and a smaller World Bank concessional envelope routed through the Trust Fund for Gaza and the West Bank.

The disbursement bottleneck is not the pledge envelope but the access architecture. UN OCHA, UNRWA, ICRC, and the World Food Programme operate the inside-Gaza distribution chain under Israeli-controlled crossing protocols at Kerem Shalom, Erez, and the Egypt-controlled Rafah crossing, which has been closed to most movement since May 2024. Throughput at the crossings has tracked the political cycle: above 500 trucks per day in the Phase 1 window, near zero in the March to April 2025 blockade and ground operations window, and intermediate values through the second half of 2025. The early Q1 2026 ceasefire arrangement has restored throughput closer to Phase 1 averages, but there is no functioning inside-Gaza institutional architecture for project disbursement at the scale the World Bank assessment contemplates.

The Saudi normalization frame, frozen since 7 October 2023 and not formally restored at any point through April 2026, conditions Riyadh's reconstruction commitment on a credible path to Palestinian statehood, a position Crown Prince Mohammed bin Salman has reiterated in public remarks and through Saudi diplomatic channels. The Lebanese context is structurally separate but adjacent: the November 2024 Israel-Hezbollah ceasefire and the January 2025 election of President Joseph Aoun in Beirut produced a different reconstruction architecture for southern Lebanon, with World Bank damage assessment placing Lebanon physical damage at 8.5 billion dollars, GCC reconstruction conditioned on Hezbollah disarmament, and a technocratic government under Prime Minister Nawaf Salam pursuing IMF program negotiations. The two reconstruction tracks share donors but not architectures, and Gulf capacity is not unlimited.

Egypt, the Rafah crossing, and the Sinai security calculus #

The Rafah crossing between Egypt and Gaza, the only Gaza crossing not directly controlled by Israel, has been closed to most movement since the IDF Rafah ground operation began on 6 May 2024 and Egypt declined to coordinate reopening with Israeli forces present on the Palestinian side. The Egyptian position, articulated by President Abdel Fattah el-Sisi in successive Cairo statements and at the 4 March 2025 Arab summit, is that Rafah will reopen only under a coordinated arrangement that excludes Israeli military presence on the Palestinian side, restores Palestinian Authority or international oversight at the crossing, and does not result in displacement of Palestinians into Sinai. The Egyptian Suez Canal Authority Chairman has separately tracked the financial impact of the Houthi Red Sea campaign on Suez transit, with Suez Canal revenue down roughly 60 percent in 2024 against the 2023 baseline of 9.4 billion dollars, an unrelated but reinforcing fiscal constraint on Egyptian flexibility.

Egyptian security doctrine on Sinai is the most underappreciated constraint in the reconstruction architecture. The 2011 to 2018 Sinai insurgency, the Wilayat Sinai affiliation with Islamic State, and the Camp David framework limits on Egyptian force deployment in eastern Sinai shape the Egyptian government's view of any scenario in which a large displaced Palestinian population settles in the Sinai. Egypt's rejection of the Trump February 2025 displacement proposal was effectively unanimous across the security establishment, the foreign ministry, and the presidency, and Cairo's support for the 4 March 2025 Arab counterproposal was conditional on the no-displacement clause being treated as a red line rather than a negotiating position. Multinationals and donors operating in the Egyptian fiscal envelope, including those engaged on the IMF program through 2026, should treat this red line as binding through any plausible 2026 to 2028 scenario.

Hamas leadership turnover and the inside-Gaza command #

The Hamas command structure has been substantially attrited but not eliminated. Yahya Sinwar, the political bureau chair after the assassination of Ismail Haniyeh on 31 July 2024 in Tehran, was killed by IDF forces on 16 October 2024 in Rafah in an encounter the IDF described as incidental rather than targeted. His brother Mohammed Sinwar, the senior Gaza military commander after the killing of Mohammed Deif, was reported killed in May 2025 in an Israeli strike on a Khan Younis tunnel complex; the new Gaza military command has not been publicly identified by Hamas in the manner of prior succession announcements. The political bureau, now operating from Doha under interim arrangements after the Haniyeh and Sinwar killings, has retained negotiating coherence on the Phase 1 framework, the Q1 2026 revised arrangement, and intermediate exchanges, but the gap between political bureau positions and inside-Gaza decision-making during active combat windows remains a structural source of execution risk.

The military formations inside Gaza are degraded relative to their 7 October 2023 baseline but functional. IDF estimates released through 2024 and 2025 placed Hamas combatants killed at roughly 17,000 to 20,000, against a pre-war estimate of approximately 30,000 to 40,000, with several thousand additional Palestinian Islamic Jihad and other faction combatants killed. The recruitment rate inside Gaza, observed through 2025 IDF intelligence assessments cited in Israeli press, has reportedly approximated the kill rate, a pattern characteristic of insurgencies with continuous local recruitment incentives under conditions of mass civilian harm. The implication for any reconstruction architecture is that a security transition that does not provide a credible alternative to Hamas governance for a substantial fraction of the inside-Gaza population is not a stable end state.

What the donor architecture actually has to deliver #

We map five workstreams that any 2026 to 2030 reconstruction architecture has to carry, regardless of the political resolution. First, immediate humanitarian flow at 500 to 700 trucks per day, restored water and sanitation access for 1.9 million people, and shelter for the displaced cohort, a workstream UNRWA, UN OCHA, ICRC, and WFP have run through the war with degraded throughput and which the World Bank assessment prices at 2.5 to 4.0 billion dollars per year for the first three years. Second, debris removal and unexploded ordnance clearance, which UN Mine Action Service has estimated will require seven to ten years and 1.2 to 1.8 billion dollars based on 2014 reconstruction precedent and the larger 2023 to 2025 footprint. Third, basic services restoration, including the Gaza electricity grid (substantially destroyed), water and wastewater, primary health care under WHO coordination, and primary and secondary education under UNRWA and UNICEF, priced in the World Bank assessment at 7 to 11 billion dollars in the first five years.

Fourth, housing reconstruction, the largest single line item, with roughly 290,000 housing units destroyed or severely damaged per UNDP and UN-Habitat tallies, priced at 18 to 28 billion dollars across a five-to-seven-year horizon under standard unit cost assumptions for Eastern Mediterranean conditions adjusted for cement and rebar import constraints. Fifth, productive sector and economic reactivation, including agriculture, fishing, small and medium enterprise, and a residual industrial base, the most likely category to attract private capital under appropriate guarantee structures and the most exposed to the unresolved governance question, priced at 5 to 9 billion dollars across a longer horizon. The five workstreams are sequential in some categories and concurrent in others, and the cost compounding is dominated by the duration of access restrictions rather than by unit prices.

Recommendations for donors, multilaterals, and multinationals #

For Gulf donors, including Saudi Arabia, the United Arab Emirates, Qatar, and Kuwait, the 4 March 2025 Cairo framework is the only architecture compatible with the Saudi normalization frame and the regional political constraint set. Pledges should be staged conditionally on access milestones at the crossings, on the formation of a credible interim governance arrangement with Palestinian consent, and on a defined Israeli redeployment, with disbursement triggered by verified throughput rather than by political announcement. The Saudi position that normalization requires a credible path to Palestinian statehood is binding through 2026 in our assessment, and should be treated as a hard constraint in any commercial or sovereign engagement with Israeli counterparts that depends on Gulf capital.

For multilateral institutions, including the World Bank, the European Union, the European Investment Bank, the European Bank for Reconstruction and Development, the Islamic Development Bank, and UN agencies, the operational design choice is between a single coordinated trust fund under World Bank Multi-Donor Trust Fund precedent and a federated arrangement of bilateral channels coordinated through an enlarged Ad Hoc Liaison Committee. The single trust fund design is administratively superior, donor coordination superior, and political feasibility lower; the federated design is the inverse. We expect the federated design to prevail by default, and donors should plan compliance, anti-diversion, and reporting architecture accordingly. Anti-diversion controls modeled on the 2014 reconstruction Gaza Reconstruction Mechanism are necessary but proved inadequate to the political question and should not be treated as politically sufficient.

For multinationals operating across the Eastern Mediterranean, including European utilities, infrastructure contractors, logistics operators, food and agricultural traders, pharmaceutical and medical device firms, and digital infrastructure providers, three positioning choices are immediate. First, qualify under the World Bank, UN, EU, and Gulf donor procurement frameworks now, ahead of any architecture freeze, since the qualification window typically closes inside six months of any framework being announced. Second, structure regional operating models that route through Cairo, Amman, Riyadh, or Larnaca rather than through Tel Aviv-only configurations, given the legal exposure created by the 26 January 2024 ICJ provisional measures order and the November 2024 ICC arrest warrants. Third, treat the reconstruction envelope as a multi-year, lumpy disbursement rather than a single procurement event, and size capacity and balance-sheet exposure accordingly. The base case in our assessment is that the gap between the 53 to 83 billion dollar reconstruction envelope and the 6 billion dollar firm commitment book persists through 2026 and into 2027, and only narrows when the governance question resolves.

Sources #

• World Bank, UN, EU Gaza interim damage and needs assessment
• UN OCHA, occupied Palestinian territory humanitarian updates
• UNOSAT Gaza Strip damage assessments
• UNRWA situation reports on the Gaza emergency
• Palestinian Authority Ministry of Public Works and Housing
• Reuters Middle East coverage of the Gaza ceasefire and reconstruction
• Associated Press Israel-Hamas war reporting
• Al Jazeera English coverage of Gaza, Cairo summit, and Arab counterproposal
• Financial Times Middle East and reconstruction reporting
• International Crisis Group Israel Palestine reports
• Egypt Suez Canal Authority operational and revenue reports
• International Court of Justice South Africa v Israel provisional measures