President Donald Trump has proposed taking control of Gaza, aiming to turn it into a “Riviera of the Middle East” while resettling Palestinians elsewhere, breaking with longstanding U.S. policy on the Israeli-Palestinian conflict.
The move has been met with immediate criticism from Saudi Arabia, which Trump hopes will help establish ties with Israel.
Market reactions were muted, with the Israeli shekel staying stable at 3.56 against the dollar.
Analysts expressed skepticism about the plan. Paul Donovan, Chief Economist at UBS, remarked, “Trump’s comments on Gaza and potential U.S. military occupation are not being taken seriously by investors.”
Francesco Pesole, FX Strategist at ING, noted, “Markets are treating Trump’s announced intention to take over Gaza with skepticism.”
David Makovsky, Director at the Washington Institute, suggested that Trump’s comments might be a negotiation tactic, saying, “Trump’s call for moving Gazans was seen largely as a negotiating ploy: maximalist opening position before reaching a deal.”
Some analysts see potential positive outcomes, with Yonie Fanning of Mizrahi Tefahot Bank noting, “We’re seeing a positive market response to the initiative,” particularly in the shekel and stock exchanges.
However, Alvin Tan from RBC Capital Markets added, “People are thinking he was just making comments off the cuff and this is not likely to be followed up as genuine U.S. foreign policy.”
The announcement shifted attention from other developments, with David Makovsky observing, “Trump’s remarks seem to shift media focus away from the Phase Two Ceasefire that is supposed to begin later this month.”
