Despite general agreement on Egypt's plan for Gaza's reconstruction, Saudi Arabia and the United Arab Emirates refuse to participate financially or practically unless it is guaranteed that Hamas will not be part of the governing body and will surrender its weapons. This has been revealed by Arab and American sources following high-level meetings in Riyadh over the past weekend. This dispute is also linked to the delay in releasing Palestinian prisoners as part of the hostage deal.
The Israeli cabinet's decision on Saturday night to halt the release of prisoners can be seen as a response to Hamas' violations of agreements, its mistreatment of hostages, and its demeaning release ceremonies. However, there are additional reasons behind this move. One is Hamas' refusal to provide information on the status of the remaining hostages, allow medical teams from the Red Cross to visit them, or facilitate the delivery of medicine.
These demands had been part of Israel's negotiating stance from the outset, but tensions escalated following the release of hostages Or Levy, Ohad Ben Ami, and Eli Sharabi two and a half weeks ago. The three were visibly weakened by harsh conditions, including food deprivation and lack of medical care. Despite multiple appeals, Hamas has only slightly improved food distribution for released hostages while continuing to reject all other demands.
A second reason behind the decision relates to diplomatic tensions. A fierce debate is underway among Arab nations involved in mediation efforts to end the war, secure the hostages' release, and rebuild Gaza. This debate reached a peak over the weekend during two meetings in Riyadh on Thursday and Friday.
The first, more intimate meeting included Saudi Crown Prince Mohammed bin Salman, Egyptian President Abdel Fattah el-Sisi, Jordan's King Abdullah, UAE President Mohammed bin Zayed, and Qatari Emir Tamim bin Hamad. In a broader meeting the following day, representatives from Kuwait and Bahrain, both Gulf Cooperation Council members, joined the discussions.
Aligning with Israel's position
According to Arab and American sources, the first meeting was particularly tense. Egypt presented its reconstruction plan as a response to President Donald Trump's controversial idea of temporarily relocating Gaza's residents during the rebuilding process. Washington has been awaiting Egypt's proposal, and national security advisor Mike Waltz recently stated on Fox News: "If you [Arab states] don't like Trump's logical ideas for solving these problems, come up with your own."
The Egyptian plan includes the establishment of a governing body – a committee – that would oversee reconstruction with a budget of $20-30 billion. This committee would exclude both Hamas and the Palestinian Authority (PA), aligning with Israel's demand to prevent PA corruption from interfering. Instead, it would be composed primarily of Palestinian technocrats, with oversight from the Arab League. Representatives from key stakeholders - Egypt, Saudi Arabia, the UAE, and Qatar – would select its members. Egypt would take the lead in management and oversight, while Gulf nations would fund the majority of reconstruction efforts.
Egypt attempted to appease Saudi Arabia and the UAE by excluding Hamas and the PA from this new governing body. However, Cairo positioned itself as the dominant player, reserving the authority to select companies and organizations involved in reconstruction, an opportunity worth billions. A senior Israeli source cynically remarked, "El-Sisi's associates will continue profiting from Gaza's conflict, but instead of smuggling fees, it will be kickbacks from contractors."
The UAE and Saudi Arabia, whose positions align closely with Israel's, are well aware of these concerns. In discussions in Riyadh, they made it clear that their financial support for the plan is not guaranteed, partly due to concerns over corruption and oversight, but primarily because of the unresolved issue of Hamas' role in post-war Gaza.
Last week, we reported that most of Hamas' leadership had agreed not to participate in governing Gaza in the initial phase. However, Hamas insisted on maintaining a role within the security forces that would be established in the territory. On this point, the UAE and Saudi Arabia refuse to compromise. While Egypt argues that negotiations with Hamas are ongoing and that the group represents a significant portion of the Palestinian population, Saudi and Emirati officials insist that Hamas must be completely disarmed.
No compromise on Hamas' disarmament
According to multiple sources, Saudi and Emirati representatives firmly stated that Hamas is responsible for the war and its devastating consequences for Gaza's residents. As a result, they will not fund any reconstruction plan that does not include the full demilitarization of the Strip. One official reportedly stated, "Not a single rifle or bullet should remain in the hands of Hamas in Gaza, because otherwise, the Strip will be destroyed over and over again, even after it is rebuilt."
Egypt attempted to argue that integrating Hamas members into governance could help "tame" the group. but they were met with the question if they succeeded in "taming" the Muslim Brotherhood, el-Sisi's main opposition in Egypt. Qatar, which funds Islamist terrorism and the Muslim Brotherhood, opposed the Saudi-Emirati stance and argued that Hamas has the right to participate in Palestinian governance. not just in Gaza's security forces but also in the broader political system.
The broader meeting on Friday failed to produce a consensus. Egypt now has just over a week until the upcoming Arab League summit in Cairo, where its plan is set to be reviewed. Without a broad agreement, the proposal is unlikely to succeed.
Israel's hardened stance
How does this connect to Israel's decision to delay the release of prisoners? Israel has identified a growing radicalization in Hamas' stance during negotiations with Egypt, driven by increasing confidence as the hostage deal progresses. Hamas has used the humanitarian aid flow and temporary ceasefire to restore its military and administrative capabilities, while also launching a public relations campaign in the Arab world to frame itself as victorious and committed to Gaza's recovery.
The humiliating release ceremonies for hostages were maximally exploited for propaganda, and Israel's restrained responses to violations have only bolstered Hamas' standing. By halting the release of prisoners, Israel is sending a message to Riyadh and the wider Arab world: it is done with turning a blind eye and will now leverage pressure points within the negotiations.
As previously reported, the US has warned Egypt that Washington will back any Israeli action in Gaza if Hamas continues to insist on maintaining its military wing. Waltz reiterated this stance in his Fox News interview, emphasizing that the US supports completely dismantling Hamas.
Israel is now hardening its position to signal its intent: it will leverage this American backing to achieve its goal of fully toppling Hamas.
