A Gaza-based construction firm has been contracted to build an Emirati-funded compound for tens of thousands of displaced Palestinians in a part of the territory under Israeli military control, two Israeli officials and two Palestinian businessmen told Reuters.

The plan for a Palestinian contracting firm staffed by Gaza workers to build the compound has not been previously reported.

It appears to signal an aim to begin reconstruction without waiting for Israel to withdraw from Gaza. Prime Minister Benjamin Netanyahu has repeatedly asserted that Israel will not allow rebuilding to begin before terror groups in the Strip disarm, in the next phase of the ceasefire under US President Donald Trump’s plan.

Employing Palestinians in construction could be a way to reduce local hostility to the project, but it remains to be seen whether large numbers of Palestinians would agree to live or work in an Israeli-held area while the vast majority of civilians live in Hamas-run areas of Gaza.

The United Arab Emirates has yet to formally announce the housing project, dubbed by some diplomats as “Emirates City.”

According to a planning map seen by Reuters, the compound would be built near Rafah on Gaza’s southern edge, an area depopulated and demolished by Israeli forces during the war with Hamas.

Gaza-based firm to do bulk of work

The four sources identified the firm as the Gaza-based Masoud & Ali Contracting Co (MACC), which has led large-scale projects in Gaza and the West Bank for decades.

One of the Palestinian businessmen, who has direct knowledge of the plan, said MACC would partner with two Egyptian firms to build it. He described the project as spanning some 74 acres and capable of housing tens of thousands of people in pre-fabricated trailer-style units stacked multiple stories high.

The sources spoke on the condition of anonymity to discuss plans that have not been announced publicly.

MACC declined to comment. Israel’s military did not immediately respond to a request for comment, nor did spokespeople for Hamas.

A UAE official did not comment directly on the plans but said the country was “firmly committed to supporting all international relief and recovery efforts in Gaza, in close collaboration with partners, to ensure that life-saving assistance reaches those in need swiftly and effectively.”

Since Israel and Hamas reached a ceasefire in October, Israel has retained control of 53 percent of Gaza, where it has demolished many buildings and built military fortifications. Gaza’s more than 2 million residents are now largely confined to a remaining sliver of land along the coast under Hamas control, mostly in makeshift tents and damaged buildings.

Gaza’s reconstruction, beginning at Rafah, is a core element of Trump’s plan to end the war, but other major steps have yet to be taken, including the disarmament of Hamas and Israeli withdrawal.

Trump’s plan is being managed by his Board of Peace, a group of international leaders that oversees a Gaza-specific body made up of officials and businessmen and a Palestinian technocratic committee meant to assume governance of Gaza from Hamas.

The UAE last week pledged $1.2 billion for Gaza at the Board of Peace’s inaugural conference. Its plans to build the housing compound were not included in conference presentations on reconstruction.

In all, Trump announced pledges of some $17 billion for emergency relief and reconstruction, including $10 billion from the US alone. Large sums have been pledged by countries to rebuild the Gaza Strip after previous wars, though, and much of it was never actually delivered.

A US official previously told Reuters that the UAE was coordinating with Washington, the Board of Peace and the Palestinian technocratic committee on the housing project.

The UAE has been one of the largest donors to Gaza since the war began in October 2023, providing almost $3 billion in assistance, according to its foreign minister. It has established diplomatic relations with Israel in 2020 under a Trump-brokered accord, and sees Hamas and other Islamist terror groups as threats to Middle East stability.

“We continue to be impressed with the UAE’s efforts for bringing a better life for Gazans in Gaza,” a US official said earlier this month.

At last week’s Board of Peace conference, Executive Board member Marc Rowan detailed the first phase of the housing plan for Gaza, saying 100,000 homes will be built in Rafah for 500,000 residents there. Over time, 400,000 more homes will be built in other parts of Gaza, Rowan said. “This is not a problem of money or collateral. This is a problem of peace.”

Yakir Gabay, a member of the similarly-named Gaza Executive Board, said last week that Gaza reconstruction will begin by clearing over 70 million tons of rubble and unexploded ordnance from the territory, along with hundreds of miles of tunnels. Some 70,000 tons of rubble have already been cleared, according to a recent report.

Plan is ‘more acceptable to Gazans’

The Palestinian businessman with direct knowledge of the compound’s planning said MACC and the two Egyptian firms had been contracted by a large Egyptian company to carry out the project in Gaza. He declined to identify the Egyptian company, which he said would ultimately be paid by the UAE.

No work has yet begun on the ground, in part because Israel has yet to approve the compound’s plans, he said.

A Western diplomat briefed on the project said contractors involved in the project had been scheduled to visit the work site earlier this month, but that it was unclear if the visit had taken place.

According to its website, MACC has built desalination plants, water-pumping stations, solar energy fields, bridges and buildings across Gaza and the West Bank with funding from partners including the World Bank and USAID.

Reham Owda, a Palestinian political analyst, said employing a Palestinian firm, rather than bringing in outside workers, would be “more acceptable to Gazans” because it would create jobs and take local culture into account.

“It will gain wide acceptance because it will help solve the housing crisis, accelerate reconstruction, and employ Gaza’s workforce,” Owda said.

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