The U.S. is weighing a request to Israel to transfer some Palestinian Authority tax revenues it currently withholds to help fund former President Donald Trump's post-war Gaza reconstruction effort, called the Board of Peace [1, 2]. Israel collects taxes on imports on behalf of the Palestinian Authority and typically transfers these funds, which the PA uses for civil servants and public services [1]. However, Israel has withheld an estimated $5 billion in such revenues, according to the Palestinian Authority [1, 2].
Under the proposed arrangement, a portion of the withheld funds would support a U.S.-backed transitional government in Gaza, while other sums would be conditional on reforms within the Palestinian Authority [1, 2]. A Board of Peace official said, “There is no doubt that money held in a bank does nothing to further the President's 20-Point Plan,” emphasizing the urgency of releasing the funds [1].
The overall cost of Trump’s Gaza rebuild plan is estimated at $70 billion, making the withheld tax money a small but important contribution to reconstruction [1]. Despite these plans, significant obstacles remain. Hamas has refused to disarm, and ongoing Israeli military activities have undermined ceasefires in Gaza [1]. These challenges complicate implementation of any reconstruction effort.
The Trump administration has not yet formally asked Israel to release the funds. Discussions and media reports about the possibility emerged around mid-May 2026, but no official request has been made as of today [1, 2].
The situation remains fluid, with further decisions expected soon on whether the U.S. will press Israel to allocate the withheld Palestinian tax revenues toward the Gaza rebuilding program.
