Explained | Why Trump's proposal on Gaza is ringing alarm bells in the region

President Donald Trump's plan for the United States to take over the war-ravaged Gaza Strip and develop it economically touches on one the most sensitive issues in the Arab-Israeli conflict.

Trump's plans are likely to heighten fears among Palestinians in Gaza, which had a pre-war population of around 2.3 million, of being driven out of the coastal strip, and stoke concern in Arab states that have long worried about the destabilising impact of any such exodus.

What is behind the concerns?

Trucks carrying aid move, amid a ceasefire between Israel and Hamas, in Rafah in the southern Gaza Strip, February 5, 2025.

Palestinians have long been haunted by what they call the "Nakba", or catastrophe, when 700,000 of them were dispossessed from their homes during the war that surrounded the creation of Israel in 1948.

Many were driven out or fled to neighbouring Arab states, including to Jordan, Syria and Lebanon, where many of them and their descendants still live in refugee camps. Some went to Gaza. Israel disputes the account that they were forced out.

The latest conflict, currently paused amid a fragile ceasefire agreement, has seen an unprecedented Israeli bombardment and land offensive in Gaza, devastating urban areas.

Most Gazans have been displaced several times during Israel's offensive, launched after the Oct. 7, 2023 attack on Israel by the Palestinian militant group Hamas that killed 1,200 people, according to Israeli tallies.

More than 47,000 people have been killed in Gaza since then, according to Palestinian health officials.

Hamas official Sami Abu Zuhri said on Wednesday Trump's remarks about taking over Gaza are 'ridiculous' and 'absurd' and could ignite the region.

How have Palestinians moved during this conflict?

FILE PHOTO: A Palestinian woman carries an aid box provided by UNRWA, following a ceasefire between Israel and Hamas, in Khan Younis in the southern Gaza Strip, January 21, 2025.

Before Israel launched its offensive in 2023, it told Palestinians in north Gaza to move to what it said were safe areas in the south. As the offensive expanded, Israel told them to head further south towards Rafah, on the border with Egypt.

Later in the war, before launching a campaign in Rafah, it instructed them to move to a new designated humanitarian zone in Al-Mawasi, an area that stretches 12 km (7 miles) along the coast, starting from the western areas of Deir Al-Balah in central Gaza to Khan Younis and Rafah in the south.

According to U.N. estimates, up to 85% of the population of Gaza - one of the world's most densely populated areas - have already been displaced from their homes.

Could a major displacement from Gaza happen?

Badreya, 42, and her children, who were displaced to the southern part of Gaza by Israel's order during the war, rest as they return to their destroyed house amid a ceasefire between Israel and Hamas, in Gaza City, January 28, 2025. Deir al-Balah is only 11 miles from their Jabalia home, but cars, which must queue for hours at an Israeli checkpoint, are rare and expensive to hire and, like most families, the Mohammeds had to walk. "I haven't slept for the past three nights from joy. I long for my land, my town Jabalia, and the people of the north, to see our kin," said Ismael, Badreya's husband.

Many Palestinians in Gaza have said they would not leave the enclave even if they could because they fear it might lead to another permanent displacement in a repeat of 1948.

Egypt and other Arab nations strongly oppose any attempt to push Palestinians over the border.

Like Palestinians, they fear any mass movement across the border would further undermine prospects for a "two-state solution" - the idea of creating a state of Palestine next to Israel - and leave Arab nations dealing with the consequences.

Saudi Arabia said it would not establish ties with Israel without the creation of a Palestinian state, contradicting Trump's claim that Riyadh was not demanding a Palestinian homeland.

The United States had led months of diplomacy to get Saudi Arabia, one of the most powerful and influential Arab states, to normalise ties with Israel and recognise the country. But the Gaza war led Riyadh to shelve the matter in the face of Arab anger over Israel's offensive.

From the earliest days of the conflict, Arab governments, particularly Egypt and Jordan, have said Palestinians must not be driven from land where they want to make a future state, which would include the occupied West Bank and Gaza.

What have Israel's government and its politicians said?

Israeli Foreign Minister Israel Katz meets with French Minister for Europe and Foreign Affairs Jean-Noel Barrot, amid the ongoing conflict in Gaza between Israel and Hamas, in Jerusalem, November 7, 2024.

Israel's then-Foreign Minister Israel Katz, now serving as defence minister, said on Feb. 16, 2024, that Israel had no plans to deport Palestinians from Gaza. Israel would coordinate with Egypt on Palestinian refugees and find a way to not harm Egypt's interests, Katz added.

However, comments by some in the Israeli government have stoked Palestinian and Arab fears of a new Nakba. Finance Minister Bezalel Smotrich has repeatedly called for a policy of "encouraging the migration" of Palestinians from Gaza and for Israel to impose military rule in the territory.