A smaller cage: Israel’s ‘two-state solution’ on Gaza’s ruins

Israel is redesigning Gaza’s territory to entrench fragmentation and indefinite occupation, paving the way for future depopulation and settlement building.

By Muhammad Shehada, Reposted from The New Arab, December 11, 2025

More than a month after the ceasefire went into effect, little has changed in Gaza. Promises of tents, caravans, and prefabricated homes have failed to materialize, while only limited food and aid are entering, with the Rafah crossing closed in both directions.

Over 360 Palestinians, including 136 children, have been killed by Israel since the ‘truce’ went into effect, leading Amnesty International to conclude that the genocide in Gaza “continues unabated”.

While the ceasefire plan promised reconstruction, humanitarian relief, and a political horizon, what has instead emerged is a new blueprint for perpetual subjugation, one in which Gaza’s territory is being architecturally redesigned to normalize fragmentation and indefinite occupation, foreclosing on any future for Palestinian self-determination.

Red zone/green zone: Keeping Gaza in ruins

Since the ceasefire was announced, Israel has bisected Gaza along what was meant to be the initial withdrawal line of the Israeli army.

The “green zone” of eastern Gaza is where reconstruction and aid would, in theory, flow more freely, and where international delegations would be allowed (but escorted by the army), whereas the “red zone” of western Gaza would remain beleaguered, devastated, and increasingly bombed.

This is what Israeli Prime Minister Benjamin Netanyahu’s close confidant and strategic affairs minister Ron Dermer called “the two-state solution… inside Gaza itself”.

The separation between those two halves is cemented through an entrenched barrier called the “Yellow Line” that has become deadlier than the Berlin Wall, where Israeli soldiers shoot to kill anyone who even comes close. The line is also elastic; the Israeli army has been incrementally moving it deeper and deeper into western Gaza to squeeze the population into less territory.

East Gaza (58% of the enclave), where “prosperity” is promised, is fully occupied by the Israeli military with no plans of withdrawal for the foreseeable future and has been thoroughly depopulated, with all inhabitants driven out by force.

Only five proxy gangs recruited and cultivated by Israel are allowed to exist there under army protection. Furthermore, Israeli troops and settler contracting companies are still systematically razing and demolishing any homes left in the very areas where supposed reconstruction is planned.

West Gaza, 42% of the enclave where two million people are caged and overcrowded, will be a “permanent refugee camp in ruins for the indefinite future,” a European diplomat stationed in Israel told The New Arab.

‘New Rafah’: Potemkin villages for propaganda

Reconstruction in East Gaza will be limited to confined areas under full Israeli control called “Alternative Safe Communities,” the first of which is “New Rafah” in the very south of Gaza on the Egyptian border.

The idea is a repackaging of earlier dystopian and widely condemned Israeli proposals, such as “security bubbles,” “gated communities,” “humanitarian areas” or “sterilised zones”, which were slammed by Israel’s former Prime Minister Ehud Olmert as “concentration camps”. That is because anyone entering ‘New Rafah’ will not be allowed back into western Gaza and would be surrounded by an ocean of Israeli troops.

The biggest red flag about this project is that it’s being spearheaded by one of the architects and proponents of the now-defunct, widely denounced, and notoriously murderous Gaza Humanitarian Foundation, whose operations led to the killing of over 2,500 starved aid seekers.

Aryeh Lightstone, an American businessman, Orthodox Rabbi and friend of Netanyahu, is acting as the liaison between Jared Kushner and Steve Witkoff in Washington and the Civil-Military Coordination Center (CMCC) in Israel. The latter was established by Trump to oversee the implementation of his 20-point Gaza plan.

There will be no actual rebuilding in eastern Gaza. Instead, what the Americans call “reconstruction” will be superficial and limited to primitive dwellings at best, a diplomatic source at the CMCC told The New Arab.

“It will be better compared only to West Gaza, but not elsewhere,” they added, explaining that housing in new Rafah would at most be made of small shipping containers with no infrastructure or permanent installations. Those containers in the summer turn into baking ovens and provide no protection against the cold of winter.

While Gaza’s reconstruction is estimated to cost well over $50 billion, the cost of ‘New Rafah’ is in the tens of millions at most, much of which would go to consultants, contractors, and for-profit companies rather than to the actual primitive structures.

The source added that the Americans will use “local contractors” to run the ‘New Rafah’, likely to be criminals from the Israeli proxy Abu Shabab gang who were previously used as “local personnel” by GHF as well.

Furthermore, Israel would thoroughly vet and screen every single Gazan who wishes to move to ‘New Rafah,’ which means enormous blackmailing powers that Israeli security agencies will use to extort and coerce applicants into becoming collaborators and informants.

Residents of those confined zones would be under constant real-time AI surveillance of phones, social media, and physical movement by the firm Palantir, which has been allegedly aiding Israel’s genocide. The overwhelming majority of Gazans would refuse to move into those areas under such conditions.

It’s no surprise the Americans and Israelis are expecting this “alternative safe community” to shelter merely a few thousand of the over two million people in Gaza. New Rafah is deliberately unimplementable, and Israel is counting on this. It would basically be a Potemkin village; a façade meant to cover up the continuation of the genocide.

This is a common tactic in violent dictatorships and genocide zones. Myanmar did a similar trick in 2023 to whitewash its Rohingya genocide, with the Burmese government building two “model villages” for 314 Rohingya families with tiny dwellings that have no bathrooms, kitchens, or food arrangements, merely as a fig leaf to cover up its atrocities, while over a million Rohingyas are still refugees in Bangladesh and neighboring countries.

North Korea has similar facades where foreign visitors would be taken on propaganda tours and shown prosperous-looking areas to create false impressions of food abundance.

Israel will keep pointing to ‘New Rafah’ to deflect from questions about why it continues to bomb, cage, starve, and deny medicine and basic necessities to Gaza’s entire population.

Despite Israeli-American pressure, however, not a single Arab, regional or Western government agreed to fund the ‘New Rafah’ and not a single international organisation agreed to operate there. However, the US is still zealously proceeding with this project at full force and already has allocated a budget for its establishment, according to the diplomat at the CMCC.

Despite their enthusiasm for the ‘New Rafah’, the Americans have not given any consideration to realities on the ground. For instance, nobody at the CMCC has an answer as to why Israel is still systematically destroying homes in the very area where it is supposed to be built.

The Americans’ “working assumption is that as soon as we build up an area and dump more food and water there, hundreds of thousands of people will want to move in,” the diplomat added to TNA.

Settlements and ethnic cleansing are still on the agenda

For Israel, however, nothing about this plan is arbitrary or random. Daniel Levy, a former Israeli negotiator and president of the Middle East Project, told The New Arab that ‘New Rafah’ serves the Israeli government’s agenda on at least four levels. First, it’s a “shiny new project” and “plaything” that Israel needs to please the Trump administration.

Second, Rafah holds a “special political usefulness” to Netanyahu, especially towards the elections. It’s the city where the Israeli prime minister stood against “everyone, including domestically and the military” when he decided to invade it in May 2024.

“Remember how important Rafah is to Netanyahu as a justification for prolonging the war; Bibi’s whole narrative is ‘people pressured me to end the war early. If I had ended the war early, we wouldn’t have done Rafah… and look at Rafah today,’” Levy told The New Arab. “Rafah is where he’ll be showing that a new ‘de-Nazified’ Gaza can be built, in his own words.”

Thirdly, the Israeli government hasn’t given up on the plan of rebuilding settlements in Gaza, and ‘New Rafah’ serves as a distraction from that. Israel could have easily located the new “alternative community” in Beit Lahia, Beit Hanoun or Jabalia in the northern part of the enclave, but choosing Rafah, right on Egypt’s borders, was deliberate.

“It’s easier for Israel to maintain and justify the permanence of its military presence in northern Gaza; kind of bordering Israel, the communities that were affected on 7 Oct …etc. Israel has every intention of [Northern Gaza] being a ‘security zone.’ They have every intention of it later becoming a settlement,” Levy added.

Yehuda Shaul, the co-founder of Israel’s Breaking the Silence, also believes Israel might push for rebuilding settlements in the very north of Gaza, in the same places where the settlements of Dugit, Nisanit, and Elei Sinai once stood.

Fourth, the ‘New Rafah’ can be a stepping stone towards Israel’s ethnic cleansing plan in Gaza. “The Zionist forces in the government favor the first rules, which are finishing the Nakba, permanent displacement, removing all of them, ethnic cleansing,” Levy told The New Arab.

“Because [new Rafah] is on the Egyptian border, you get people there, then things go wrong, then war restarts, and you’ve got them all on the border there, you push them across.”

Israeli officials have made this intention clear by saying structures in ‘New Rafah’ are only “meant to be temporary,” and that while residents of that caged area would be completely cut off from the rest of Gaza, they would “enjoy greater freedom to leave Gaza”.

Netanyahu is keeping Hamas in power so Gaza remains in ruins

Israel is conditioning any reconstruction of western Gaza on the full disarmament of Hamas, its removal from government, the entry of Trump’s International Stabilization Force (ISF) and the thorough destruction of “terror infrastructure,” which could take years while Gaza remains a wasteland.

Hamas had long agreed to hand over governance to a technocratic administrative committee and to allow some 5,500 Palestinian policemen trained in Egypt and Jordan to take over the security sector. Netanyahu, however, is still prolonging the approval of that committee and outright rejected the entry of the police force into Gaza.

Israel is also obstructing the creation and deployment of Trump’s ISF by vetoing the participation of troops from Turkey or Qatar and by demanding that the ISF act as a subcontracting proxy for the Israeli army, which no country has accepted to do.

The ISF was supposed to enforce the ceasefire, act as a protection force for Palestinians, train and supervise the local police, oversee security sector reforms, monitor the borders, create a buffer between Gaza and Israel, and report on ceasefire violations.

However, Israel wants it to also use violent force against Palestinians, carry out counterinsurgency work, destroy the infrastructure and weapons of armed resistance groups, and detain or clash with their members.

At the same time, the European diplomat told The New Arab that Israeli security officials have been “skeptical,” “bitter”, and “hostile” towards the idea that an international force can disarm or dismantle militant groups in Gaza.

Israeli officials have been telling Western governments that the “ISF will not be able to handle Hamas” and “the IDF will stay in Gaza for the medium future,” which the diplomat said is “Israel’s way of saying permanently”.

In other words, Netanyahu knows it’s unrealistic to demand that ISF troops do what Israel itself failed to accomplish over 24 months of unprecedented warfare and genocide: destroy the Palestinians’ will to resist their occupiers.

But the Israeli insistence on this demand is meant to make it impossible for any country to join the ISF, lest those countries become explicitly complicit in genocide. This way, the Israeli army can remain in charge of Gaza uncontested.

Last Saturday, the Washington Post reported that Trump’s ISF idea is falling apart already, with the White House struggling to find an alternative. Israel is already pitching “alternative options” to the Trump administration, including “a full occupation of the Gaza Strip” and resuming military operations.

Behind the scenes: Gaza’s new colonial ruler in Israel’s pocket

Over 200 US military personnel, with no experience or knowledge about the Palestinian context, are sitting in an abandoned factory “out in nowhere” in Israel’s Kiryat Gat, ironing out the details of what Gaza should look like for the foreseeable and long-term future, according to the diplomat at the CMCC.

The American Colonels haven’t spoken once to the Palestinian Authority, let alone any Gazans on the ground. Instead, they have mainly been soliciting advice and insights from right-wing and “centrist” Israelis and at best Palestinian citizens of Israel who have never been to Gaza.

The colonels avoid addressing any root causes of the crises on the ground and evade any political discussions that require the slightest pressure on the Israelis to change their policies of siege, closure, or separation.

They instead deal with what they call “technical issues”; superficial cosmetic and immediate changes, within the constraints defined by Israel, rather than trying to change the status quo on the ground. If Israel refuses to allow certain foodstuffs into Gaza, CMCC offers another scanner to Israel on top of the many they have already, the diplomat said.

That’s precisely how Israel quickly learned how to play the Americans and buy time, by bogging them down in technical details. “We are playing a game of whack-a-mole,” the source told The New Arab.

He explained that Israel floods the CMCC with talking points, propaganda, and technical excuses to justify purely political decisions, such as the continued closure of Rafah, preventing reconstruction, and restricting the amount of aid entering Gaza. CMCC staff then spend days to vet and debunk Israeli claims or find a “middle ground,” and by the time they reach an answer, the Israelis give them newer talking points.

“CMCC operates at the goodwill of the Israelis; it’s a kind of GHF in a way, it’s a version of the coalition provisional authority in Iraq; it’s that same colonial mindset,” Daniel Levy told The New Arab.

“It’s that same inability to understand what they are dealing with, that same arrogance, politically ideologically driven on the Israeli side and a colonial mindset on the American side.”

‘New Rafah’ is cloned from an identical American plan in Syria, a veteran UN diplomat who worked extensively on the Syrian file told The New Arab. He said the first Trump administration sought to divide the country into “East and West Syria” separated by the Euphrates River.

The Americans promised to make eastern Syria, under Kurdish control, into a prosperous “Dubai” and to concentrate reconstruction, aid, and funding there, while western Syria would remain sanctioned, besieged, and bombed until it withers and collapses. The UN diplomat told The New Arab that just like eastern Gaza, eastern Syria was never turned into a Dubai.

Ultimately, ‘New Rafah’ will be a ghost town inhabited by a few hundred gang members and their families and used as a propaganda project to show a façade of kindness, while the genocide is gradually restored to its full pre-ceasefire intensity.

This plan is a confession of malevolent intent, not a vision for peace. It reveals a strategy where reconstruction is replaced with confinement, sovereignty with surveillance, and dignity with despair.

By constructing a propaganda façade meant to deflect the world’s gaze, the architects of this plan seek to license the endless continuation of siege, starvation, and military domination.

This is not a lifeline, but the final tightening of a noose. Gaza’s future cannot be a choice between a bombed-out prison and a surveilled cage; justice demands a complete rupture from this status quo. Otherwise, if Israel gets its way, the West Bank could be next.

Muhammad Shehada is a Palestinian writer and analyst from Gaza and EU Affairs Manager at Euro-Med Human Rights Monitor.

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