Israel’s Economy Minister Nir Barkat emphasized the country’s desire for a peaceful Gaza but stated that no decision has been made regarding funding its reconstruction. Speaking at the World Economic Forum in Davos, Barkat stressed that rebuilding Gaza is contingent on Hamas demonstrating a commitment to lasting peace with Israel.
The ceasefire between Israel and Hamas, which began on Sunday, follows 15 months of intense conflict that left Gaza in ruins and further inflamed tensions across the Middle East. Barkat highlighted the stark choice facing Hamas: “The key question is whether they want to build a thriving economy, like Dubai, or continue the destructive path that Gaza has endured.”
He added, “Dubai recognized Israel and focused on mutual economic growth. We want to see a Dubai-like development in our region, not a continuation of Gaza’s current state.”
War’s Aftermath and Reconstruction Challenges
The conflict began on October 7, 2023, when Hamas launched a cross-border assault that killed 1,200 Israelis and resulted in over 250 hostages being taken. Israel’s subsequent military campaign has left over 46,000 people dead in Gaza, according to Palestinian health officials, and displaced most of the enclave’s 2.3 million residents, humanitarian agencies report.
Prime Minister Benjamin Netanyahu had vowed to continue the war until Hamas was eliminated, arguing that peace and security for Israel were unattainable as long as the group remained in power. While international donors like the UAE and U.S. President Donald Trump’s administration have expressed interest in rebuilding Gaza, they insist Hamas must relinquish control to ensure long-term stability.
Despite the ceasefire, Hamas has quickly reasserted authority in Gaza, restoring basic services and maintaining security. Barkat said Israel is open to facilitating reconstruction efforts led by nations like the UAE and Saudi Arabia, provided the rebuilt Gaza does not pose a threat to Israel.
Trump’s Support and the Abraham Accords
Barkat welcomed the return of Donald Trump to the U.S. presidency, noting that his administration offers stronger backing for Israel compared to Joe Biden’s. “We’ve moved from a supportive administration that restrained us to one that provides robust support, helping us secure our objectives,” Barkat said.
He expressed optimism that Trump’s leadership could expand the Abraham Accords, which normalized Israel’s relations with the UAE and Bahrain during Trump’s earlier term. Barkat believes the accords could extend to Saudi Arabia and other nations, further reshaping alliances in the Middle East.
Strained Relations with Turkey
Efforts to restore trade ties with Turkey remain stalled. Turkey severed trade links with Israel last year in response to the Gaza conflict but signaled it might reconsider if the ceasefire proves durable. Barkat, however, reported “no progress” in these discussions.
Economic Policy and Budget Debate
Domestically, Barkat has called for a more expansive budget to fuel economic growth, opposing the austerity measures proposed in Israel’s 2025 budget. The current plan includes tax increases and spending cuts aimed at addressing a $25 billion deficit caused by war expenses. Barkat argued that prioritizing growth over austerity could yield long-term financial benefits, saying, “If we achieve strong growth, the debt will be repaid quickly and with surplus.”
