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By Raja Khalidi
Abstract: The blatant enabling by the Trump Administration of Israel’s return to yet more war, brutality, and disregard for international law confirms that Trump’s 2024 plans for Palestinians are no better than those of Trump 2016. It is now clear that Trump is willing to consider ethnic cleansing in Gaza to pave the way for imperial capital and real estate brokers, while tolerating Israel’s recurrent massacres of Palestinian civilians, children, and medical relief staff. Meanwhile, Arab states and the EU have remained silent on Israel's genocidal war in the Gaza Strip and the West Bank. As things have played out since Trump assumed power, prospects for Palestine look worse today than they did three months ago.
Israel’s decision several weeks ago to abandon the Gaza ceasefire, imperil the fate of its remaining hostages, and dash any hopes for a negotiated settlement after 18 months of war took Palestinians by surprise. The blatant enabling by the Trump Administration of Israel’s return to yet more war, brutality, and disregard for international law confirms that Trump’s 2024 plans for Palestinians are no better than those of Trump 2016. As things have played out since he assumed power, prospects for Palestine look worse today than they did three months ago.
It is now clear that Trump is willing to consider ethnic cleansing in Gaza and to tolerate Israel’s recurrent massacres of Palestinian civilians, children, and medical relief staff. Meanwhile, Arab states and the EU have remained silent on the genocide and devastation in Gaza and of Israel bulldozing refugee camps in the West Bank, which has “cleansed” them, to date, of over 50,000 of the poorest of the poor. Israeli settler violence and land-grabs throughout the West Bank are also targeting remote villages, ancient Beduin pastoral communities, and the heart of Palestinian cities purportedly under the administration of the Palestinian National Authority.
Nowhere is safe, everybody is fair game: this is the situation to which Palestinians awake daily. Do Palestinians have no choice but to be the homo sacer of the 21st century, whereby they live outside the protection of any laws and are abused and killed without consequence?
While seven million Palestinians under Israeli rule face the new realities unleashed by October 7 and the war since, the sense of an existential threat to their nationhood, prospects for independence, and their very survival, is palpable. Political disunity, petty factional infighting amongst the leadership, and the absence of a common vision for liberation only add to the sense of insecurity and anxiety felt throughout Palestine as we contemplate our future. In a moment of historic weakness of the Palestinian national movement but historic strength of the justice perceived around the world to the 75-year-old Question of Palestine, Palestinians can at best survive and be prepared for what might yet come. This includes the grand designs of regional and global powers, especially the United States in the grips of a mercurial President with wacky ideas about how to treat the rest of the world.
We have reached a zero-sum moment, where the likelihood of an imposed resolution of the conflict is much greater than a negotiated path. The current leadership in the United States and Israel, and the configuration of power in the region, portends that the era of conflict management, or asymmetric containment, is over. We are now embroiled in an attempt to force a decisive end to the conflict on terms dictated by the victors, which means the surrender of the Palestinian people to permanent rule by Israel.
Final Farewell to “Economic Peace”?
Much ink has been used over the past two decades—this writer’s included—on the concept and application of Israeli and American “economic peace” as a recurrent tool for managing the Palestinians in its midst. Since 1967, Israel’s occupation of the West Bank and Gaza Strip has been marked not only by relentless waves of military aggression, destruction, mass incarceration, and collective punishment—but also by a parallel strategy: co-optation through economic enticement.
From the first years of occupation, Israel sought to neutralize Palestinian resistance by cultivating relationships with select local elites—economic, tribal, and administrative figures. For every colonial stick, there was also an economic carrot, offered as a promise of prosperity in exchange for acquiescence. These incentives were promoted by the Israeli military administration as alternatives to resistance—as an offer of material well-being under “benevolent” occupation.
For the first 25 years of the occupation, Israel’s "civil administration,” working in coordination with high-level U.S. backing under the guise of “improving the quality of life,” oversaw economic relations with the occupied territories. It launched initiatives aimed at stimulating commerce and creating jobs in exchange for “quiet” and the end of armed resistance. From as early as 1968, Israel encouraged Palestinian labor migration to neighboring Arab countries, which served as a kind of economic—and demographic—release valve. But the return of hundreds of thousands of Palestinians from the Gulf after the first Iraq war disrupted any Israeli ambitions of gradually depopulating Palestine, at least until 2023. Furthermore, by 1987, these efforts did not prevent the first Palestinian uprising, despite improvements in economic and social indicators.
After Israel agreed in 1993 to the creation of the Palestinian National Authority with limited jurisdiction over the Gaza Strip and 40% of the occupied West Bank, its approach to managing the occupation barely changed. Israeli policy continued to oscillate between brute force, collective punishment, and the appearance of engagement in the “peace process.” Economic cooperation was encouraged, and Israel granted selective privileges to businessmen and high-ranking officials, while offering poor laborers work permits for employment inside “the green line” and its illegal settlements. This mix entrenched a complex web of economic dependency, underpinned by political submission and security subjugation to Israel’s extended occupation.
This approach was known as “asymmetric containment”—a strategy through which Israel managed its relations with both the Palestinian National Authority in Ramallah and Hamas in Gaza. The result was a constant cycle of wars, lulls, reconstruction, and relapse. For years, Israel managed to convince the world that it remained committed to the interim Oslo framework and to a peace process that would ultimately lead to a so-called “permanent status agreement.” Even as it intensified its colonial settlement drive across the West Bank, Israel maintained a dual strategy toward Hamas: economic overtures punctuated by repression and war. Over time, this perpetual cycle of crisis management became the dominant concern of Palestinian politics, overshadowing the broader national project of liberation and statehood. By the eve of the October 2023 war, the long-cherished goal of independence had begun to feel like a distant mirage.
Today, with Israel’s war of annihilation and forced displacement well into its eighteenth month and with no credible prospect of international intervention to stop the killing and destruction in Gaza or the West Bank, there is no room left for the mirage of economic peace. The soft tools of containment have outlived their usefulness in the era of Israel’s ascendant messianic Zionism. As detailed in a recent Palestinian report on the political economy of the war, the age of asymmetric containment has come to an end. In its place stands a maximalist Zionist project, now reaching its apex: the eradication of the Palestinian people, the dissolution of their cause, and the denial of their national aspirations. If previous Israeli governments were, at times, willing to entertain the principle of a two-state solution, Israel in 2025—and much of its Jewish citizenry—has no interest in any contractual arrangement that recognizes Palestinian rights. Under the vision of this new messianic brand of Zionism, now firmly in control of the Israeli state, there is no room for sovereignty between the river and the sea for anyone else except that of the Jewish people and their state.
A Dangerous Convergence
What is most alarming in this new phase of the Israeli-Palestinian conflict is not only Israel’s escalating campaign to delegitimize Palestinian rights or its war aimed at erasing Palestinian life and geography. The greater threat may lie in the growing harmony between Israel’s colonial actions and the imperialist agenda of the new American administration.
Israel’s renewed attempt to defeat the resistance in Gaza, its sequestering of Palestinian National Authority funds and erosion of its already limited jurisdiction, its plans to forcibly empty Gaza of its people, and its bulldozing of West Bank refugee camps are driven by a renewed and unapologetic appetite for shock-and-awe militarism and violence. Israeli and American weapons can, in a single Ramadan night, kill 180 Palestinian children without consequence or even a cursory UN Security Council session, and muted media coverage in the liberal Western media.
Amid international paralysis and Arab complicity or negligence, the alignment between United States and Israeli policy has created a “perfect storm” - one that threatens not just Palestinian statehood, but the very presence of Palestinians in their homeland. At best, it portends total subjugation under Israeli rule and the dismantling of national institutions. At worst, it signals the end of the Palestinian people as a national group in their homeland.
This is precisely the vision articulated in Israeli Finance Minister Bezalel Smotrich’s “Decisive Plan,” which has been implemented over the past two years—and at an accelerating pace in recent months. Israeli policy is easy enough to decode; one need only read government official statements or listen to the racism spewed daily by media and Knesset voices of the new messianic Zionism. Meanwhile, Trump’s America operates with a kind of improvisational chaos. Its policies are loosely sketched, grandiose, often incoherent, but ultimately driven by a consistent strategic doctrine of unwavering support for Israel, no matter how many international laws are violated or humanitarian norms upended.
What sets this Trump-led vision apart from earlier U.S. administrations is not merely style, but substance – into a raw and transactional neo-colonialism. In Trump’s world, Palestine is not a political problem but a real estate or resource opportunity, like Greenland; its people are not a nation but a labor force. This vision for Gaza advances unchecked—not just because of Israel’s military supremacy, but because of the ideological marriage between resource plunder and ethno-nationalist supremacy now binding U.S.-Israeli relations.
Economic Peace as Permanent Status
What can explain the symbiotic understanding, between Israeli and American leadership in this phase — unlike earlier decades where the two occasionally clashed, even during the Oslo years, over settlements, recognition of Palestinian leadership, or the framework of land for peace?
During the early months of Trump’s return to power, there were brief moments of pressure on Israel to reach a prisoner-exchange deal and vague calls for limited Israeli withdrawals. But these were quickly reversed. Trump’s administration soon gave Israel the green light to return to unrestrained military action. One moment, Trump is floating proposals for emptying Gaza of its people to make way for foreign capital under the guise of reconstruction. The next moment, his administration is walking back any mention of forced ethnic cleansing. Even in dealings with Hamas, Trump’s policy at first oscillated between backchannel negotiations and threats of annihilation unless the group disarmed and surrendered control of Gaza. As for the eventual political solution, Trump’s chief negotiator, Steve Witkoff, has suggested that it might involve a two-state model—or perhaps something else entirely. Such erratic swings might appear unpredictable, but behind it all lies a firm ideological commitment and an unshakable strategic alliance with Israel.
While this unshakeable strategic alliance is true for all previous US presidents, the Trump administration adds two new, existential threats to the Palestinian cause. First, this Administration is the product of a brand of rapacious capitalism eager to extract resources (natural, mineral, and human) and consolidate global markets under the control of multinational conglomerates. This logic of resource plunder aligns with Israel’s settlement enterprise. Second, Trump’s revived vision of a “Deal of the Century”—including its economic arm, the “Peace to Prosperity” plan— remains the administration’s blueprint for resolving the Israeli-Arab conflict.
Today, economic peace is no longer a strategy to manage conflict or delay diplomacy. Now it stands alone—as the plan, the policy, and the political settlement. This is what makes the current moment especially dangerous.
Trump does not merely flout and disregard the rules of diplomacy and international norms (as with his claims on Greenland, Canada, or the Panama Canal), but seeks to rewrite them entirely. His vision for resolving the Palestinian question rejects political negotiation, Palestinian rights, borders, or sovereignty. Instead, it imagines Palestine as a lucrative development zone, its inhabitants recast as a compliant and grateful labor force, and the conflict itself rendered obsolete by investment and glossy infrastructure.
Statements by Team Trump clearly outline his vision: Gaza is a real estate opportunity and its population is a human resource to be deployed in the service of global capital. According to this view, there is no need to negotiate land, rights, or national identity—only to improve “quality of life” metrics by offering jobs in AI, robotics, and tech-based manufacturing; or by exporting Palestinian workers to other countries in exchange for US largesse and patronage.
This economic doctrine contends that Palestinian demands for national liberation, justice, or self-determination are obstacles that can be replaced with investment portfolios and innovation zones. This approach is most crassly reflected in Trump’s idea to rebuild Gaza through a public-private scheme based on a Build-Operate-Transfer (BOT) model, with an inordinately inflated reconstruction estimate of one trillion dollars, operationalising a proposal from mid-2024 attributed to an Israeli-American academic.
Behind the scenes, it was Trump’s son-in-law, Jared Kushner—now playing investor rather than envoy—who first floated the idea of depopulating Gaza to turn it into the “Riviera of the Middle East.” A mega-developer from the UAE unveiled another version of such a takeover plan: a $50 billion Arab-international conglomerate would “own” Gaza, manage relief, reconstruction, and even local governance until such time as Palestinians could “administer themselves.” A new kind of Arab financial colonialism, absent settlers but not domination. Other visions floating around include that advanced by a liberal British-Jewish foundation, backed by global investors, promoting a similar post-war “economic revival” of Gaza regardless of who governs and in total disregard of any principles of a political resolution.
These delusional agendas are just the tip of the iceberg. There is now a dizzying amount of plans circulating offering reconstruction, investment, and every conceivable alternative to a two-state solution.
Palestinians will not sign a deed of surrender
Trump’s predatory capitalism and Israel’s genocidal agenda are in lockstep. Both have now abandoned the Palestinian National Authority—once seen as a useful buffer against resistance and a compliant subcontractor in the architecture of occupation. But Trump’s core assumption—that every human right has a market price, and that Palestinians will eventually sell theirs—is as grotesque as it is wrong.
Even if Hamas and the Palestinian National Authority are obliged to engage with Trump’s delusions and humor him—out of sheer caution or fear of provoking further catastrophe— he will not find any Palestinian to sign a deed of surrender. At this stage of the struggle, Palestinians must either unite as a nation yearning for liberty, or risk perishing. Palestinian diplomacy, long focused on leveraging an international rights and security order that has collapsed, should re-examine its purposes and strategy of continued engagement in the UN and international justice forums. That by their inaction condone and empower a genocidal campaign against Palestine. But if apartheid is the cost to be paid for surviving on the land, then there is no doubt that Palestinians will weather it. ُTheir struggle can only continue.
Raja Khalidi is a development economist and Director General of the Palestine Economic Policy Research Institute (MAS).
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