Gaza reconstruction stalls as Trump’s Board of Peace faces funding shortfalls

More than seven months after President Donald Trump brokered a ceasefire deal for Gaza, the territory remains in a grim limbo with no reconstruction underway, the so-called Board of Peace struggling to secure funding, and Palestinian technocrats chosen to administer the strip stranded in Egypt.

In a May 15 submission to the UN Security Council, the Board of Peace said the “principal obstacle” to realizing Trump’s plan for Gaza was Hamas’s refusal to hand over its weapons and cede control of the strip, but several people familiar with the body said funding shortfalls could jeopardize the effort.

Nine countries pledged $7 billion (£5 billion) to a “Gaza relief” package at the inaugural meeting of the Board of Peace, which Trump chaired. But only the United Arab Emirates and Morocco have sent funds, according to a person familiar with its operations.

The group has received $23 million to fund its operations, as well as an injection of $100 million to fund a future Palestinian police force, the person said. In sum, that amounts to $1.75 for every $100 pledged.

The United Nations has estimated the total cost of rebuilding Gaza to be upward of $70 billion over decades.

Several countries that initially pledged funds to the Board of Peace are now reluctant to pay, after months of stalled diplomacy and no progress on the ground, according to five people familiar with the organization.

“Countries are hesitant to pay their portions,” said one diplomat familiar with international negotiations about Gaza, who was not authorized to speak publicly. The Iran war has provided cover for delays to payments, another source said.

“Nobody with money and resources wants to work with the Board of Peace,” said a third person familiar with the group’s efforts, who, like others critical of the initiative, asked to speak on condition of anonymity for fear of retribution. “Lump on the conflict with Iran, and the people with deep pockets now have an excuse not to pay.”

Nickolay Mladenov, a Bulgarian diplomat tasked with delivering the US president’s vision as “high representative” for Gaza, admitted last week that Palestinians in Gaza had been let down by the world.

“The door to the future of Gaza is still closed. It is not what the Palestinians were promised, and it is not what they deserve,” Mladenov told journalists in Jerusalem. The impasse also jeopardized Israel’s long-term security, he added.

Mladenov’s May 15 report to the UN Security Council urged donor states to contribute funds “without delay.” “Funds committed but not yet disbursed represent the difference between a framework that exists on paper and one that delivers on the ground for the people of Gaza,” the Board of Peace submission said.

A senior Board of Peace official denied urgent funding challenges and said its donors remained committed. The appeal to the UN was made in the context of longstanding shortfalls in payments for UN aid programs in occupied Palestine, the official said.

The board is confident it can collect pledges as needed to fund its programs, which are still mostly in the planning stages, the official said. Morocco, Bahrain and the United Arab Emirates have all transferred money to support the group’s overhead costs and fund training for a Palestinian police force, he said.

A person familiar with the board denied Bahrain had transferred any money. The Bahraini embassy in Washington did not respond to a request for comment.

Trump also pledged $10 billion of US funding which has not been disbursed. Board officials have not formally requested the $10 billion in pledged US funds, the senior official added. They are controlled by Jeremy Lewin, a US State Department official.

Aryeh Lightstone, a key adviser on Middle East policy in both of Trump’s administrations, is “the only person” handling fundraising conversations for the Board of Peace, a senior board official said. For months, Lightstone has shuttled between Tel Aviv, Abu Dhabi and Washington to wrangle support for Trump’s vision, including with aid organizations to discuss Gaza’s needs.

Among the board’s expenses are the salaries for 12 Palestinians chosen to run a planned civilian administration in Gaza, the National Committee for the Administration of Gaza (NCAG), who are in Egypt, waiting for security guarantees and diplomatic permissions to enter Gaza.

They are being paid an average of $16,000 to $17,000 a month, according to a person familiar with the committee. Mladenov is slated to earn about $400,000 a year for his role leading the board, according to records reviewed by The Guardian.

Asked about the figures, the senior Board of Peace official said he could not comment directly. “I’m not the CFO … but those were eye-popping.”

A board spokesperson said the salary figures provided to The Guardian were “incorrect” and payments to Palestinian technocrats are modeled on the salary scale used by the Palestinian Authority. He declined to comment further.

The NCAG, which answers to Mladenov, has not had any tangible impact on Palestinian life inside the strip, the sources said. “Not a single bottle of water has come into Gaza under the NCAG flag since January 2026,” a person familiar with the committee said.

When the ceasefire deal for Gaza was agreed in October last year, critics and US allies warned it was dangerously vague on the fraught details of reconstruction, governance and security for Gaza. It called for an international force to secure Gaza, paving the way for reconstruction, an aid surge, the demilitarization of Hamas and a full withdrawal of Israeli forces.

More than half a year on, there is no international force or any actionable plans to create one. Israeli forces still control well over half of Gaza. They limit critical shipments of food and other aid.

Most survivors still live in makeshift, unsanitary camps; hunger is widespread; schools have not reopened; there are critical shortages of clean water; and healthcare is hobbled by damage to buildings and shortages of staff and supplies.

Trump and his aides have laid out plans for a future which could hardly be more removed from the current reality of ruins and humanitarian disaster. Over the past year, they talked about transforming the strip into a gleaming hub of tourism and trade, with airports, seaports and “AI-powered, smart cities” for Gazan residents.

“Let’s plan for catastrophic success,” Kushner said to potential donors in Davos in January. But there has been no significant work on reconstruction, even basic projects in areas of Gaza under full Israeli military control.

Last year US officials said fenced semi-permanent camps could be ready to house thousands of Palestinians in those areas by summer.

Several contractors have submitted bids to clear rubble, provide security and build compounds in Gaza but said they have not received contracts for work.

“Nothing has happened. They haven’t even contracted to remove rubble,” said one person, speaking on condition of anonymity for fear of retribution.

Mladenov acknowledged both sides have violated the ceasefire but repeatedly blamed Hamas for the lack of progress, saying the group must give up its weapons to pave the way for reconstruction.

At stake is the future of more than 2 million Palestinians in Gaza, mostly displaced and desperate to rebuild after a war deemed genocidal by a UN commission, rights groups and genocide scholars.

In the unlikely event Hamas agreed to disarm, the Board of Peace would be unable to deliver the support on the scale needed in the war-ravaged territory, said one person familiar with the body. “The worst outcome is that Hamas agrees to disarmament, and then says ‘go ahead, start delivering’,” they said. “What will they do?”

A senior Board of Peace official disputed that assessment. “It happens to be that we’re more than prepared and we would not fail,” they said.