Trump's Gaza peace plan: Will his ‘deal of the century’ earn him a Nobel and lasting Middle East peace?

This is what US President Donald Trump wrote on his social-media platform, Truth Social, after the US-designated terrorist group expressed willingness to release all Israeli hostages held captive for nearly two years.

Israel also responded positively to the announcement, saying it was preparing for the first phase of Trump’s 20-point peace plan.

Voila—the self-confessed deal maker appears to have delivered what he long promised the world: an end to the brutal Gaza war that has claimed over 60,000 Palestinian lives in retaliation for the killing of roughly 1,200 people, mostly civilians, and kidnapping of 251 individuals.

But will it translate into a lasting peace in the region?

For starters, Hamas hasn’t yet accepted the peace proposal in full.

Trump's Comprehensive Plan to End the Gaza Conflict requires Hamas's complete surrender, with the promise of a safe passage to go where they wish—Jordan, Egypt, Qatar, or Iran.

But the group has been running the embattled city for almost two decades. And given the fraught history it shares with Israel, there are lingering doubts over whether Benjamin Netanyahu will actually follow through and allow them to leave safely.

No, Israel doesn’t want to take over Gaza.

The plan is that the Israel Defence Forces (IDF) withdraw slowly as the proposed peacekeeping force—the International Stabilisation Force (ISF)—comprising personnel from the US, Arab nations, and other countries, gains control.

The ISF would train local police, prevent the smuggling of weapons, and ensure the smooth flow of aid and supplies, in close coordination with Jordan and Egypt.

Until then, the IDF will maintain a “security perimeter", which is essentially a buffer zone—and, yes, people aren’t happy about that.

Next comes governance—the “Day After" plan.

Gaza would be managed by a temporary, neutral team of Palestinian professionals and international experts. They would handle day-to-day operations—public services, city management, and more—and report to a new body: the “Board of Peace".

And who would be at the helm of that board?

You guessed it—Mr. Trump.

Another surprise inclusion is Tony Blair, the former British prime minister who served as an international peace envoy to the Middle East. (By the way, recall the Iraq WMD scandal? What are the odds that people in the Middle East would have forgotten that…?)

Still, the plan includes measures to ensure that “New Gaza" poses no threat to any country, asking neighbouring states to keep Hamas and other groups in check.

If all this works out, Trump may indeed become a Nobel Peace Prize contender. The key participants of the Oslo Accords—a series of agreements between Israel and the Palestine Liberation Organisation (PLO) in the 1990s, aimed at achieving a peaceful resolution to the Israeli-Palestinian conflict—all won the prize.

That and all the business opportunities for Trump's real estate business—his son-in-law, Jared Kushner, has strong connections with Middle Eastern power players.

Peace in the Middle East could open up significant trade opportunities for India. But here’s the twist: Pakistan has been unusually close to the US during the rollout of this peace plan. Trump even thanked Jordan, the UAE, Saudi Arabia, and India’s regional rival for being genuine participants in the process.

This is going to get a bit awkward for India.

Meanwhile, here are some of the week's other headlines:

The US government shuts down

While Trump was busy fixing the world, the world’s oldest democracy screeched to a halt.

Parts of the US government came to a standstill this week as the President’s Republican Party clashed with Democrats over a spending bill. Republicans control both chambers of Congress, but in the Senate—the upper chamber—they fall short of the 60 votes needed to pass the legislation.

The standoff centres on healthcare spending. Democrats have refused to support a Republican bill they argue would make healthcare less affordable for Americans. Budget confrontations are common in US politics, but this one is especially tense because Trump has spent the past nine months cutting the size of the federal government.

In retaliation, Trump froze $26 billion allocated to Democratic-leaning states, following through on a threat to use the shutdown to target Democratic priorities. When normal operations might resume is anyone’s guess. The last shutdown of this kind, in 2018 during Trump’s first term, lasted 35 days—the longest in US history.

Trump wants US forces to fight invasion from within

Trump has proposed using American cities as training grounds for the armed forces and spoke of needing US military might to combat what he called the “invasion from within".

Addressing a meeting of top US military commanders who were abruptly summoned back home to listen to Trump and defence secretary (or war secretary since the department has been renamed department of war) Pete Hegseth, the US President outlined a muscular and, at times, norm-shattering view of the military’s role in domestic affairs.

Hegseth, on his part, demanded an end to “woke" culture and announced new directives for troops that include “gender-neutral" or “male-level" standards for physical fitness.

Xi pushes Trump to oppose Taiwan independence

China and the US have been attempting to negotiate a trade deal, and the negotiations have been intense. Both presidents would like to tell their people that they wrung out significant concessions from the other.

Word is that Xi Jinping is pushing for the US to change a decades-old phrase describing its stance on Taiwan independence, a concession that would be seen as a major diplomatic win for Beijing.

China has asked the Trump administration to officially declare that it “opposes" Taiwan independence. This would be stronger than the Joe Biden administration’s previous statement that the US does “not support" self-ruled Taiwan seeking formal independence.

Frozen Russian funds for rebuilding Ukraine

The European Union (EU) is looking for a way to fund Ukraine's defence and reconstruction with the Russian central bank's assets immobilized in the West after Moscow's invasion.

There is political support for the idea in principle. But there is a small problem: Under international law, sovereign assets cannot be confiscated.

So, some countries, most notably Belgium, want clarity on the legal and fiscal risks. Belgium hosts the Euroclear financial clearing house that holds bonds for the Russian central bank.

These bonds have matured, and the resulting cash balances have been frozen due to EU sanctions against Moscow and are being held by Euroclear.

The EU believes it can circumvent this issue by redirecting these cash balances to the EU. In return, the European Commission would issue zero-coupon bonds to Euroclear for the same amount.

Elizabeth Roche is an associate professor at O.P. Jindal Global University.