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U.S. Weighs Using Withheld Palestinian Taxes for Trump's Gaza Rebuild

The proposal would steer frozen PA revenue toward a U.S.-backed transition plan for Gaza.

Palestinians inspect the site of a Friday Israeli air strike on houses, at Shati (Beach) refugee camp in Gaza City, May 9, 2026. REUTERS/Dawoud Abu Alkas/File Photo
U.S. President Donald Trump's bruised hand, as he attends a charter announcement for his Board of Peace initiative aimed at resolving global conflicts, alongside the 56th annual World Economic Forum (WEF), in Davos, Switzerland, January 22, 2026. REUTERS/Jonathan Ernst/File Photo

Overview

  • U.S. officials are considering asking Israel to transfer part of the Palestinian Authority’s withheld tax revenue to President Trump’s Board of Peace to help finance Gaza reconstruction.
  • The administration has not decided whether to make a formal request, according to officials familiar with the internal talks.
  • Palestinian sources say the draft plan would fund a transitional Gaza administration backed by the U.S., with separate transfers to the PA only if it carries out specified reforms.
  • Palestinian officials say Israel is holding about $5 billion in PA tax revenue collected on imports, a freeze that has forced salary cuts for West Bank civil servants and strained basic services.
  • A Board of Peace official urged all parties to mobilize resources for the roughly $70 billion rebuild, while Hamas’s refusal to disarm and continued Israeli strikes have stalled implementation.