A pilot project aimed at creating a humanitarian and governance zone in southern Gaza as part of the broader Trump peace plan is facing significant challenges, according to officials involved in the initiative. The pilot, designed to house approximately 50,000 Gazans willing to relocate, marks a preliminary step before more complex actions such as Hamas disarmament, Israeli military withdrawal, and installation of an interim Palestinian government take place.

The proposed zone, referred to as "New Rafah," would be established in an area under Israeli Defense Forces (IDF) control near the demolished city of Rafah. An international stabilization force, commanded by U.S. Army Maj. Gen. Jasper Jeffers and composed of foreign troops, would separate the zone from Israeli territory to provide security. According to Board of Peace officials, Palestinians moving into the zone would be free to travel back and forth into Hamas-controlled Gaza. The project, estimated to cost $150 million, aims to provide temporary housing alongside humanitarian and medical support, with completion targeted before the end of 2026.

The plan was detailed in recent briefings to the U.S. Congress, seeking to demonstrate progress after earlier skepticism about the peace effort’s tangible achievements. However, humanitarian organizations such as the World Food Program report that despite improvements in food access, the overall humanitarian situation in Gaza remains dire. The enclave, controlled by Hamas and under tight restrictions by Israel, continues to suffer from shortages of water, medicine, and sanitation, worsened by funding gaps and limited entry for aid.

The Israeli government has expressed conditional support for the deployment of the international force and the establishment of the pilot zone. Israel’s security cabinet stated that Palestinian entrants would undergo individual screening to identify potential Hamas affiliations. Additionally, the presence of foreign troops would require direct approval from Prime Minister Benjamin Netanyahu, along with foreign and defense ministry oversight. Some analysts, including former U.S. Ambassador to Israel Dan Shapiro, question whether Palestinians would feel secure moving into what would effectively be Israeli-controlled territory.

Complicating the implementation, the project contends with ongoing disputes over territorial control. The IDF has expanded the de facto border—marked by a so-called "yellow line" defined by concrete barriers—encompassing roughly 70 percent of Gaza, beyond the 53 percent area envisioned in the peace plan. Israeli military officials emphasize their operational control of this expanded zone, where movement restrictions have led to lethal force against those crossing the line.

Internationally, funding for Gaza’s reconstruction and stabilization remains fragmented. The Board of Peace is reportedly ready to request $200 million from U.S. State Department peacekeeping funds to supplement approximately $300 million pledged by other countries. Bahrain and Morocco have publicly contributed, while a recent European Commission agreement with 15 European countries commits about $1 billion to support early recovery projects in Gaza. However, donors retain discretion over the management and allocation of these funds.

Despite ongoing negotiations aimed at securing Hamas’s sequential disarmament in tandem with Israeli withdrawal, trust between the parties remains low, with each side insisting the other act first. Hamas recently appointed Khalil al-Hayya as its new leader, who emphasized reconstruction efforts independent of political compromises or external conditions but offered no concrete plan for how this would be achieved.

Senior Board of Peace officials expressed cautious optimism, noting progress behind the scenes and affirming strong working relations with Israeli leadership. They highlighted the pilot project as a strategic move to advance certain elements of the peace plan amid stalled wider negotiations, while acknowledging the complexities posed by political timing, including Israel’s upcoming elections in October.