Senior US official confirms plan to build housing compounds in Israeli occupied Gaza

A Trump administration official confirmed reports that it is working on a plan to build housing for thousands of "screened" Palestinians behind the so-called yellow line in Gaza, which is occupied by Israeli troops, according to a report by The New York Times published on Wednesday. 

The plan to build these housing compounds, dubbed “Alternative Safe Communities”, is being led by a team of US officials and former Department of Government Efficiency workers, or Doge, who are based in the luxury beachfront Kempinski and Hilton hotels in Tel Aviv, The New York Times reported. 

The article cited dozens of US officials and people familiar with the plan, but obtained a public confirmation from Aryeh Lightstone, who the New York Times identified as a senior Trump administration official leading the effort. 

Lightstone, an American rabbi, served as senior advisor to former US ambassador to Israel, David Friedman, during the first Trump administration. He has been identified as an advisor to President Donald Trump’s envoy, Steve Witkoff. 

According to The New York Times, he is now reporting to Jared Kushner, Trump's son-in-law and advisor, and in contact with Secretary of State Marco Rubio and Vice President JD Vance. 

Lightstone’s team also includes unnamed “Israeli magnates”. It’s unclear who is footing the bill for Lightstone and his staff to live at the Kempinski and the Hilton hotels, which can cost upwards of $700 per night.

“There’s a practical issue: How do we get people into safe housing as soon as humanly possible?” he told the New York Times when asked about the plan to send Palestinians into Israeli-occupied Gaza. 

Rubble clearance to start

“This is the easiest way to do that,” he said, marking the first time the US has publicly confirmed it is actively working to move Palestinians into Israeli-occupied Gaza. 

Kushner floated earlier this year the idea of the US and its partners reconstructing parts of Gaza occupied by Israeli troops, while leaving the war-ravaged enclave’s core, which is governed by Hamas, destroyed.

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Arab officials from multiple countries involved in the Gaza ceasefire previously told Middle East Eye that their capitals oppose the plan. 

While The Atlantic reported on the plan earlier this month, The New York Times report provides several new details about the effort.

It still appears in its infancy and seems to be the brainchild of a select group of political appointee US officials with close ties to the Israeli government. 

The report said that Israeli soldiers are expected this week to begin clearing rubble for the first compound being constructed in Rafah, near Gaza’s border with Egypt. 

The rubble clearance could take months if crews discover tunnels, unexploded munitions or human remains, the article said. It would then take another six to nine weeks to erect prefabricated homes, the officials added. 

At its core, the plan would require Palestinians in central Gaza to willingly accept living under territory controlled by Israeli troops.

Gaza cryptocurrency 

The plan also needs money. The New York Times report said that constructing the prefabricated houses will cost tens of millions of dollars, but there is no clear funding in place. 

The Trump administration has not pledged any US sovereign funds for Gaza’s reconstruction. Trump says he wants Gulf states to invest in it. 

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Lightstone previously worked as the CEO of the Abraham Accord Peace Institute, which was acquired by the Heritage Foundation in 2025. 

Lightstone and his group are working on other plans for the destroyed enclave, including a Gaza cryptocurrency and an urban plan to make the enclave traffic-free, the report said. 

One of many elephants in the room for this plan is Palestinian ownership of the land on which the sites will be built. The Gaza Strip has a formal land registry. The registry was run by Hamas but followed the basic institutional framework of the Palestinian Authority’s system.

The New York Times said that the officials have tried to obtain the land registry from Rafah and are exploring ways to pay for the land where the compound will be built. It’s not clear whether Palestinian owners will be given a choice whether to sell their land or not. 

In the occupied West Bank, which Israel has occupied since 1967, the government and settlers have seized swaths of Palestinian land and evicted thousands of Palestinian families from their homes, with scant regard for private property rights or human rights. 

Israel has reduced most of Gaza to rubble in the war on Gaza, which has been recognised as a genocide by the United Nations, world leaders and genocide scholars. The UN estimates that the enclave’s reconstruction will cost roughly $70bn.