Strategic Alternatives for the Gaza Strip

The proposal opposes a unified Palestinian rule in the Strip, particularly by the PA, on the grounds that it is committed to the narrative of resistance against Israel, is corrupt, and too weak to effectively govern. Instead, the proposal calls for decentralization and fragmentation of the governing system in Gaza into five local administrations (aligned with Gaza’s five districts). These local administrations would be responsible for civilian governance and promoting deradicalization in the education system and government structures. An international authority would assist in advancing these processes as well as in reconstructing infrastructure and the economy in the Strip.

This proposal, similar to the “day after” vision presented by Prime Minister Netanyahu shortly after its publication, does not explain how the vital enlistment of Arab states in support of Gaza’s reconstruction and deradicalization processes can be achieved without granting the Palestinians a political horizon. Ultimately, responsibility is expected to fall on Israel’s shoulders—both in civilian aspects and in matters of public order and internal security—with all the significant military, economic, and legal-political costs this entails.

According to publicly available security estimates, the cost of maintaining a military occupation of the Gaza Strip is estimated at approximately NIS 25 billion annually. Around NIS 20 billion would go toward military operations in the Strip, reservist service, and other military expenses. An additional NIS 5–10 billion per year is estimated as the cost of operating a civil administration mechanism and providing basic civilian services to Gaza’s Palestinian population. It should also be noted that prior to Israel’s disengagement from Gaza in 2005, a significant portion of the budget for managing the area came from local economic revenues and taxes, which, given the current devastation in Gaza, can no longer be relied upon as the source of income for funding the costs of the military administration.[10]

As the occupying force in the Gaza Strip, Israel would be perceived as fully responsible for the area, including its civilian affairs. Legally, it is likely that maintaining a continued military occupation, in and of itself, would not impose significantly greater costs on Israel than the current situation in the West Bank. However, under such a reality, Arab states (and even more so, international actors) would likely refuse to invest heavily in Gaza’s rehabilitation. Without such civilian reconstruction, prolonged humanitarian crises may develop, reflecting negatively on Israel and potentially inciting further radicalization among the Palestinian population.

Furthermore, a situation of ongoing military conflict between Israel and resistance elements in Gaza could negatively impact relations with Egypt—ranging from potential terrorist spillover and refugee movement into the Sinai Peninsula to Egyptian demands to alter agreements with Israel. Other Arab states would likely view this scenario as harmful and a source of instability, especially if it includes renewed Jewish settlement in the Gaza Strip. In addition, continued pursuit of the military occupation alternative could hinder normalization efforts with Saudi Arabia, whose broader strategic vision is the resolution of the Arab–Israeli conflict and the creation of a regional alliance to strengthen Israel’s national security.

The analysis reveals advantages to the military occupation option—but only if it is part of a broader strategy of Gaza’s civilian reconstruction and stabilization, and if it concludes within a relatively short timeframe, in a context where there are no Israeli settlements in the Strip and a relevant actor can assume governance. The military administration would provide full security control and extensive intelligence access on the ground, leading to severe blows against Hamas, the dismantling of terror infrastructure, and the ongoing elimination of security threats emanating from Gaza; it would sever Hamas’s control over the population and the resources of the Strip. A military administration would allow Israel to supervise the deradicalization of education and civil life; and it would facilitate reorganization of the humanitarian aid system—including pushing out UNRWA, which sustains the refugee narrative and collaborates with Hamas. Additionally, the direct financial costs to Israel are expected to be manageable, as are the political-legal consequences.

However, if the military occupation alternative is viewed as a long-term, standalone strategy, its costs will become extremely burdensome. First, regardless of military success, it will not eliminate Hamas—as evidenced in the West Bank and the long history of Israeli control over Gaza since its capture in 1967. Hamas’s deep roots in Gaza will not disappear, especially in the absence of foundational efforts to foster a political and ideological alternative. Military occupation will preserve the resistance narrative, whether through Hamas or other platforms.

Moreover, continued occupation would impose escalating military and economic costs on Israel at a particularly difficult time. Maintaining the occupation would require large military forces, reducing Israel’s ability to manage risks in other sensitive arenas; it would place full responsibility for Gaza’s civilian governance on Israel, with all the political complexities and financial burdens that entails; it would erode Israel’s strategic relations with Arab states and freeze normalization with Saudi Arabia, which is intended to form a moderate regional alliance against Iran and radical Sunni Islam; it would attract strong international pressure and place full blame on Israel for the situation; and it would inflict major economic damage on Israel—especially at a time when the economy is recovering from war-related expenses and facing a global climate of uncertainty, marked by rising protectionism and trade wars.

Alternative C: Continuation of the Current Situation (Postponing Decisions)

This alternative refers to a reality in which Israel does not maintain a presence or at least extensive military activity in the Gaza Strip, and at the same time refrains from promoting political initiatives to remove Hamas from power. In the short term, this is the option that would allow the implementation of the outline for the release of the hostages and the postponement of wide-ranging military and political moves to eliminate Hamas. In this alternative, Israel’s activity would be limited in the civil sphere to controlling the amount of humanitarian aid entering the Strip (without monitoring it and without having responsibility for its distribution), and in the military sphere, would be satisfied with pinpoint actions to neutralize threats, and from time to time increase military activity as a preemptive measure or in response to terrorist acts originating from the Gaza Strip.

This alternative is based on a strategy of emergent behavior, adapting to the changing reality and attempting to exploit it for Israel’s needs, rather than trying to shape it. Currently, this is not an official policy of the State of Israel, and it is difficult to assume that at any point in the foreseeable future, Israel will decide to adopt it officially. However, it is a realistic alternative, stemming from a dynamic in which Israel refrains from advancing military or political initiatives in the Gaza Strip or fails to implement the initiatives it tries to promote.

Several scenarios could lead to this problematic reality, including Israeli adherence to the “voluntary emigration” alternative without successfully implementing it; American pressure to avoid occupying the Strip for political reasons; or a temporary military occupation without attempting—or failing—to establish an alternative Palestinian government. The development of such a reality could also be influenced by external factors, such as the willingness of Arab states to intervene in the Strip to stabilize and rebuild it; renewed fighting in the north against Hezbollah; an attack on Iran’s nuclear facilities; or internal political crises in Israel that divert attention from stabilizing the Strip.

This scenario is expected to negatively impact the civilian reality in the Strip: in the absence of reconstruction processes, the Strip would remain mired in a reality of collapsing infrastructure and public systems—most of the population displaced, lacking housing and transportation infrastructure, facing difficulties in the regular supply of electricity and water, poor sewage treatment, an economic and employment vacuum, and deep gaps in the ability to provide state services such as welfare and health. Although it is likely that Qatar would be willing to invest in the civilian stabilization of the Strip—and perhaps even partially contribute to its reconstruction—under these circumstances, Hamas’s position in the Strip would only strengthen.

In turn, the problematic civilian reality would feed deeper social processes. On the positive side, it cannot be ruled out that the harsh living conditions could eventually lead to a process of disillusionment within Gazan society with violence and terrorism and the heavy toll they exact.[11] This would resemble the way in which the lessons of the Second Intifada gradually became embedded in Palestinian society in the West Bank, helping to calm the area for a significant period. However, on the negative side—and likely to a much greater extent—the same difficult reality is expected to fuel troubling social processes such as widespread crime and violence, local power struggles, and serve as fertile ground for the spread of religious extremism among the population.

Politically, this alternative would, in the short term, lead to the reconsolidation of Hamas’s centralized rule, as already occurred following the implementation of the first ceasefire (January–March 2025). Conversely, over time, the unbearable living conditions in the Gaza Strip, alongside Israeli military pressure, could lead to the weakening of Hamas’s rule. In this optimistic scenario, new and more moderate political and religious ideas and leaderships—emerging from introspection prompted by the civilian distress in the Strip—would begin on the political periphery and gradually gain growing support among Palestinian society. However, in the more likely negative scenario, the weakening of Hamas’s rule would lead to processes of “Somalization”—disintegration and chaos—that would also give rise to the emergence of new-old threats against Israel, such as the rise of global jihadist groups, along with bitter and violent power struggles between Hamas and rival factions, which would spill over toward Israel (for example, through attempts by Hamas to deflect threats onto Israel and rally the public under the banner of fighting it).

In the security arena, this alternative would preserve the Gaza Strip as a breeding ground for terrorism and violence and increase the direct security risks to the State of Israel. In the absence of any arrangement that limits its operations, Israel would indeed enjoy diplomatic freedom to exert military pressure on Hamas and other terrorist organizations in the Strip. At the same time, this freedom of action would occur under conditions of reactive operations, such as targeted killings or raids, and through limited rounds of escalation in time, space, and intensity—similar to the security reality that existed vis-à-vis the Gaza Strip prior to October 7. (If Israel chooses to depart from the “do nothing” approach and launch a broad military occupation, this would constitute the abandonment of this alternative).

In conclusion, it is difficult to assign a high probability to the emergence of positive scenarios for Israel from an alternative of postponing critical decisions. The more likely and dangerous consequences for the State of Israel include the potential for humanitarian crises to spill over into Israeli territory; erosion of existing peace agreements with Arab countries; stagnation of the normalization initiative with Saudi Arabia; and the perpetuation of an unbearable civilian reality that would serve as a hotbed for violence and extremism—whether from Hamas or from other actors.

Alternative D: Alternative Palestinian Governance

The option of fostering a moderate Palestinian government to replace Hamas’s rule in the Gaza Strip includes a broad range of possibilities from a local Palestinian administration separated from the PA, to a local Gazan administration with symbolic and limited ties to the PA as part of a Palestinian federation that maintains the framework of an agreement with Israel; and extending to the reinstatement of the PA’s control over the Gaza Strip; and ultimately, to integrating the Strip into an agreement that grants the Palestinian territories the status of a state.

Israel’s policy throughout the war reflects inconsistencies and internal disagreements regarding the desirability of this alternative and its possible characteristics. It appears that former Defense Minister Gallant supported creating such an alternative, while those in the prime minister’s circle toyed with the idea—unlikely from the outset—of fostering local leaderships modeled after the “village leagues” with a non-political municipal character intended to fragment Gaza’s political system. In any case, during the war, no attempts were made to implement these ideas, and they were abandoned in favor of encouraging “voluntary emigration,” once President Trump introduced the idea in February 2025.

The concrete initiative currently on the table for alternative Palestinian governance in Gaza is based on the Egyptian proposal, which received the Arab League’s support in March 2025. This proposal, promoted by Egypt throughout the war, was expanded to include the issue of reconstruction as a counterweight to the voluntary emigration plan. The core of the initiative includes the establishment of a local Palestinian “administrative committee” that would operate for six months to lay the groundwork for the return of the PA to govern the Strip. On the civilian front, the proposal includes a reconstruction outline for Gaza’s infrastructure and economy, without requiring population evacuation, with an estimated budget of $53 billion. Funding would come from donations by countries and international organizations, and the PA would lead the reconstruction effort. On the security front, Egyptian and Jordanian forces would train and establish Palestinian policing forces, alongside support for the deployment of international peacekeeping forces. However, the proposal contains problematic aspects such as allowing various Palestinian factions to retain weapons, and it does not offer a framework for demilitarizing Hamas or dismantling its military wing—beyond stating that resolving the issue should come through granting Palestinians national rights and establishing a Palestinian state, which would theoretically eliminate the need for continued armed struggle against Israel.

Senior Hamas officials have clarified that they accept the Egyptian initiative and are willing to relinquish civilian control of the Strip, but they will oppose demilitarizing and any attempt to introduce non-Palestinian forces into the territory. The Israeli government quickly expressed its opposition to the initiative, and the Trump administration also claimed it was insufficient, stating that the president’s voluntary emigration policy remains unchanged, although the US Special Envoy to the Middle East, Steve Witkoff, noted that the Egyptian plan contains positive elements worth discussing further.

The Egyptian initiative thus provides a framework for ending the war and securing the hostages’ release while officially ending Hamas’s rule in Gaza and laying the groundwork for civilian reconstruction. However, the proposal offers unstable foundations for long-term stabilization of Gaza. The PA would regain control of the Strip without being required to implement significant reforms that would ensure effective handling of corruption and incitement. More critically, Hamas would retain its weapons, ensuring its continued status as the dominant power on the ground.

Beyond these issues, the flaw in this alternative lies in its reduction of the Hamas problem to a matter of governance, without addressing the root cause of violent resistance to Israel deeply embedded in Palestinian society. Under such conditions, Hamas’s resurgence is only a matter of time—as is the potential emergence of additional radical ideologies.

Various analyses and studies published after October 7 that propose outlines for the “day after” point to the importance of “creating conditions that allow for the rehabilitation and transformation of a nation led by a murderous ideology, including the development of stable institutions and a Palestinian, Arab, and Muslim culture that does not preach jihad and accepts the existence of the State of Israel as the nation-state of the Jewish people.”[12]

These studies draw on lessons from past cases of successful and failed responses to extremist organizations such as al-Qaeda, the Islamic State, and the Muslim Brotherhood, and from the deradicalization of countries and societies that lived under extreme and violent regimes—such as Nazi Germany, Imperial Japan, the Ba’ath regime in Iraq, and the Taliban in Afghanistan. Three essential conditions for the emergence of a moderate political and ideological alternative to extremism repeatedly emerge from these historical examples: military defeat of the extremist regime, deradicalization of the society, and the provision of a political horizon for national independence.

A military defeat of Hamas aimed at enabling the rise of a more moderate alternative does not require the complete destruction of the organization’s military capabilities (a goal that is likely unachievable), but rather a degree of defeat that reduces it from a major threat to a marginal one. This would prevent the organization from sabotaging future arrangements in Gaza and the broader Israeli–Palestinian conflict, while buying time for the emergence of a more appealing moderate ideological alternative within Palestinian society.[13] However, given Hamas’s current military capabilities, it cannot yet be said that the threat it poses has become marginal. Furthermore, such defeat involves imprinting a sense of loss in Gazan society—a perception that is open to interpretation and debate. While some point to a lack of introspection among Palestinians regarding the brutality displayed on October 7, trends in Palestinian discourse on social media and early signs of protest within Gaza present a more complex picture, including harsh criticism of Hamas and even hopes for the return of the PA to power in Gaza.[14]

Deradicalization of Palestinian society requires rehabilitating not only Gaza’s physical infrastructure but also the cultural foundations of Palestinian society—fundamentally uprooting the ideology of hatred from legal, educational, religious, and media systems and replacing it with a new narrative. This change should include purging extremist figures from governance and daily life, changing content and training, and implementing oversight mechanisms. However, it is also crucial to offer the defeated nation a narrative of continuity that allows it to preserve elements of its identity while shifting that identity in a constructive, nonviolent direction. Specifically in Gaza, the focus should be on transitioning toward a moderate Sunni-Muslim worldview. It is also important to secure Islamic leadership legitimacy for this process, based on moderate alternatives that may already exist in Gaza and following models developed by Arab states in confronting extremism within their own territories.[15]

Political horizon—The Israeli discourse on Gaza’s deradicalization, as reflected in Prime Minister Netanyahu’s previous vision for the “day after” (February 2024), focuses only on military defeat and the eradication of incitement from government and daily life systems. In contrast, the literature on the topic, including comparative analyses and historical case studies, emphasizes the need to provide the defeated nation with a positive political vision of statehood and acceptance into the international community. This is meant to enlist public and leadership support for deradicalization and to secure the international cooperation necessary to fund and implement reforms.[16] Even in the Palestinian case, “since Palestinian researcher Dr. Khalil Shikaki began publishing his surveys, a clear rule has emerged: whenever the Palestinian public perceives a near and viable political horizon, it supports the Palestinian movement that represents that vision. Conversely, when despair from the political path rises among Palestinians, public support for Hamas increases.”[17] Nevertheless, political progress should be contingent on achieving clear and measurable benchmarks—not bound by a strict timetable—including education for peace, renunciation of violence and terrorism, and effective security and governance capabilities.

At the heart of the dilemma regarding the political horizon is the question of whether it necessarily requires the explicit goal of establishing a Palestinian state. Saudi Arabia has demanded this goal since October 7,[18] and it is part of the current Egyptian initiative supported by Arab countries. However, it runs counter to the position of the Israeli government, which is backed by consistent polling indicating a continued decline in Israeli public support for the two-state solution—and a sharp drop in support since October 7.

Alternatively, there is the option of a compromise formula between the Israeli and Arab sides around a horizon of political independence and limited, demilitarized Palestinian sovereignty. It is worth noting that this alternative could receive relatively broad public support among the Israeli public. A survey by INSS from December 2024 indicated that only 14% of the Jewish public and 19.5% of the overall Israeli public supported a moderate Palestinian authority in the Gaza Strip as the best alternative for the day after Hamas rule (Figure 3).

Figure 3.