Egypt could lose economic aid if it refuses Trump’s Gaza plan: report

TNA Staff

The New Arab  /  March 24, 2025

Egypt has outright denied the reports of it accepting the plan in return for financial aid, reiterating its refusal to displace Gaza’s population

Egypt could lose American economic support if it refuses to take in hundreds of thousands of Palestinians from Gaza, a message conveyed to Cairo from the president of the United Arab Emirates has indicated, a source told The New Arab’s sister site.

Egyptian diplomatic sources revealed to Al-Araby al-Jadeed that President Mohammed bin Zayed al-Nahyan’s brief visit to Cairo over the weekend included discussions the UAE leader had with American officials on Gaza, where Israel resumed its offensive last week.

Al Nahyan had met with US President Donald Trump during his recent visit to Washington.

Trump has proposed forcibly displacing the Palestinians from war-torn Gaza into neighbouring Egypt and Jordan, something the two Arab states have refused, and which has been slammed as an attempt to ethnically cleanse the territory.

Cairo proposed a counterplan which would see the reconstruction of Gaza in phases and an overhaul of its government, but Trump and Israel have rejected it.

Other countries including Syria, Sudan and Somalia have been suggested as other options, but these countries have also refused.

Al-Nahyan’s meeting with Egyptian President Abdel Fattah al-Sisi in Cairo is reportedly part of Washington’s continued pressure on Egypt to accept moving the Palestinians into Sinai, which borders Gaza and southern Israel.

According to the Egyptian source which spoke to Al-Araby al-Jadeed, the message received by Sisi states that this was the last chance to achieve mutual benefit by allowing a portion of Gaza’s population into Egypt in exchange for financial support and injecting billions of dollars into the troubled Egyptian economy.

If Cairo refuses the offer and insists on rejecting Trump’s controversial plan, alternatives could mean redirecting economic aid meant for Egypt to other countries, the source said.

The US proposal includes transferring between 500,000 and 700,000 Palestinians to North Sinai. This was also reported by Israel’s i24NEWS channel.

The source explained that the US and Israel were currently focusing on Egypt for the displacement plan, and will later focus on Jordan where they wish to move Palestinians from the occupied West Bank, something Amman has strongly opposed.

The Israeli foreign ministry has already set up a directorate to facilitate the “voluntary” exit of Palestinians, and many far-right Israeli officials have called for the full annexation of Gaza – and the West Bank – and the reconstruction of Israeli settlements.

Egypt denies reports

The Egyptian government on Monday reiterated its “complete and categorical rejection” of media allegations which say it accepted to displace Gaza’s inhabitants in exchange for economic aid.

Cairo had already denied the allegations on Friday.

“Egypt reaffirms its firm and principled position of absolute rejection of any attempt to forcibly or voluntarily displace our Palestinian brothers from the Gaza Strip to any location outside of it, particularly to Egypt,” Egypt’s State Information Service (SIS) said in its recent denial.

It added that such a move would end the Palestinian cause and pose an “imminent threat to Egyptian national security”.

“Egypt has borne enormous economic and financial burdens as a result of its stance [on Gaza] … that have never pushed it toward any concession, even the slightest, regarding its own national security requirements and the general security of the Arab world, or regarding a single legitimate right of the Palestinian people,” said SIS.

Egypt proposes new Gaza deal

Egypt has floated a new proposal aimed at restoring the Gaza ceasefire deal, security sources told Reuters on Monday, as Palestinian health authorities said Israeli strikes had killed at least 65 people in the enclave in the past 24 hours.

The proposal, made last week, follows Israel’s resumption of air and ground operations on 18 March, effectively ending a two-month period of relative calm after 15 months of war which has in total killed over 60,000 people, mostly civilians.

The Egyptian plan calls for Hamas to release five Israeli captives each week, with Israel implementing the second phase of the ceasefire after the first week, two security sources said.

Hamas is still holding 59 captives, with 24 of them thought to be still alive, among the more than 250 it seized on 7 October 2023. Most of the rest have been freed in periodic negotiated exchanges.

Both the US and Hamas have agreed to the proposal, the security sources said, but Israel has not yet responded.

A Hamas official did not confirm the proposed offer, but told Reuters that “several proposals are being discussed with the mediators to bridge the gap and to resume negotiations to reach common ground that would pave the way to start the second phase of the agreement”.

The sources said the Egyptian proposal includes a timeline for a full Israeli military withdrawal from Gaza, backed by US guarantees, in exchange for the release of remaining captives.

But Israeli Strategic Affairs Minister Ron Dermer will discuss Israeli military control of the Gaza Strip with senior US officials during a visit to Washington this week, The Times of Israel reported, citing an Israeli official.