In President Trump's speech to the Israeli Knesset he said that reconstructing Gaza will be very expensive; but that the Muslim world can afford it because some of them (ie the Gulf States) are very rich.
But is this really true?
Or was he just trolling the Muslim world into considering another option?
What he was certainly saying is that neither the US nor Israel would be paying.
After all, Trump and his key negotiators Steve Witkoff & Jared Kushner are New York property developers. They probably have very good instincts on this and may even have run the numbers.
So let run some of the numbers ourselves.
True Cost of Reconstructing Gaza
There are a number of stages to reconstructing Gaza, each of which needs to be substantially completed in a large area before the next stage can begin in that area:
Removing all IEDs and booby traps left by Hamas and any unexploded IDF ordinance;
Demolishing structurally unsound buildings;
Clearing away and disposing of all the rubble;
Remediating the soil itself which has been severely fractured by the (militarily essential) demolition of Hamas's 700km tunnel network;
Building new infrastructure (water, electricity, sewage, roads, internet etc) in the remediated soil.
Building new foundations of buildings in the remediated soil.
Building new housing, mostly apartment blocks, for 1.5-2 million people.
To get to Trump Gaza or indeed any serious reconstruction of Gaza is a long and expensive road.
Read on to discover just how long and expensive it is.
A. The Hamas Tunnel Strategy
But first we must understand the consequences of something unprecedented in all the history of human affairs.
Hamas built a military tunnel network estimated to be around 700km in length and 10m - 70m deep underneath Gaza, an area only 42km long and 6-12km wide. It was more concentrated in urban areas but extended to the whole of Gaza. It is jokingly referred to as the Gaza Metro. They turned the entire territory into a gigantic military base and missile silo. A detailed description by professional soldiers of Hamas Tunnels, their tactical uses and strategic purposes can be found on pages 18-23 & 30-35 of this Military Journal.
[Source: https://www.usatoday.com/story/graphics/2023/10/24/hamas-gaza-tunnels-visual/71303827007/]
Note that only a small percentage of tunnels known in November 2023 are shown.
Hamas had hoped the IDF would rely primarily on air power and they would ride out IAF airstrikes deep underground and then emerge briefly to fire missiles at Israeli civilians and inflict costly hit and run warfare on the IDF.
Instead of bombing tunnels (which is expensive and not that effective) the IDF used highly trained & specially equipped (under)ground troops to advance into tunnels, killing defenders as they went and then engineering troops to destroy tunnels with carefully placed high explosives.
One of the key Israeli aims of the war and an essential step in demilitarising Gaza, as required by Phase 2 of the Trump Plan, is the destruction of this entire military tunnel network. The IDF had completed about 50% of the task prior to Phase 1 of the Trump Deal. Israel's Defence Minister & Prime Minister have made it clear that the destruction of the remaining tunnels will commence shortly in Phase 2.
B. The Consequent State of the Soil
Hamas's tunnel strategy & the devastating defeat it suffered have had serious consequences for the structure and stability of the Gazan soil and sub-soil.
I have had Grok calculate the average distance between Hamas tunnels in urban and rural areas of Gaza based on density in urban areas being twice that of rural. It calculated an average distance of 347m apart in urban areas and 695m apart in rural areas. This is extremely dense, much denser than any real Metro.
I then asked Grok to calculate the distance either side of a tunnel that had been explosively destroyed where the soil would be severely fractured such that major remediation would need to be carried out before anything could be built there. It calculated that a strip 208m wide (104m on each side of a tunnel) would be subject to severe damage based on peak particle velocity (PPV) physics.
Grok used this threshold & definition of a Severe Damage Zone:
Threshold: PPV > 0.05 m/s causes plastic deformation, radial fracturing, and liquefaction risk in saturated zones, rendering soil unsuitable for load-bearing without remediation.
Based on this calculation there would be a 173m wide strip between 347m apart parallel tunnels that would not be in the Severe Damage Zone.
I then asked Grok to calculate the cumulative effect of tunnel explosions on these less damaged areas and it concluded that Severe Damage Zones would overlap such that 100% of Gaza's urban area (164 km2) and 59% (89 km2) of its rural areas will be Severe Damage Zones which will require extensive soil remediation before anything new can be built.
All the calculations can be found in this Grok analysis.
1) Removing War Materiel
Before any work can be be commenced by civilian contractors, Gaza needs to be cleared of all Hamas booby traps, IEDs, unexploded ordinance and all other explosive material. Hamas consistently booby trapped almost every building it vacated and this is why the IDF has had to destroy so many buildings. Hamas also extensively planted IEDs in buildings and rubble. Most of the Hamas fighters who planted these booby traps & IEDs are dead and so knowledge of their placement etc is probably mostly lost.
There is a huge "de-mining" effort that needs to be done in Gaza before any real work can commence.
Based on precedents like Mosul in Iraq (a tiny fraction of the size of Gaza) Grok estimates this cost at $1.8 Billion with an optimistic timeline of 15-20 years.
It is well known that civilian mine clearing is very time consuming because it has to be done very carefully for the safety of the civilian workers. While an advanced military force like the IDF can deploy hundreds of thousands of troops in heavily armoured vehicles, de-mine explosively & accept a certain level of losses, civilian contractors cannot do this and must proceed slowly and carefully.
This Grok analysis can be found here.
2) Demolishing Unsound Buildings
Given that 100% of Gazan urban land is structurally unsound and requires remediation, it follows that ALL buildings in Gaza are unsound and need to be demolished.
In any case the UN has calculated that 84% of Gazan buildings are damaged (with only 12% in the light damage category).
I asked Grok to use international figures for the cost of demolition via various methods excluding data from biased sources.
It came in with an estimate of $1-2 Billion and a timeline of 1-2 years.
This Grok analysis can be found here.
3) Clearing & Disposal of Rubble
Once all buildings in Gaza are demolished, the rubble needs to be cleared away and disposed of.
I have asked Grok to do a calculation of the total amount of rubble there will be after the complete demolition of every building and it came up with a figure of 140 million tons based on first principles analysis from square meterage of buildings and also from the current UN estimate of 60 million tons of rubble from a variety of levels of damage to buildings.
Based on international rates for clearing and disposal Grok estimates the cost of clearance and disposal at around $7 billion and 6-9 months.
This Grok analysis can be found here.
4) Remediating the fractured Gazan soil & sub-soil
As calculated earlier, 100% of Gaza's urban area (164 km2) and 59% (89 km2) of its rural areas will be Severe Damage Zones which will require extensive soil remediation before anything new can be built.
I asked Grok to calculate the cost of remediation of Severe Damage Zones down to 30m (noting that some Hamas tunnels extended as deep at 80m). It considered a range of remediation technologies and costs from other large remediation projects globally and came in with a figure of "$550–$1,100 million per km² (low end for optimized wet DSM in uniform soil; high end for complex fractured/saturated conditions)."
It is important to note that the water table is quite high in Gaza, especially the urban areas closer to the coast. The depth of the coastal aquifer ranges from 8m near shore to 60m in the mostly rural east. Thus much of the remediation will be done in difficult fractured / saturated conditions.
The calculation is quite sensitive to depth as remediation costs increase at the cube power of depth and cheaper technologies do not work below 12m depth.
I adopted the 30m depth figure for a number of reasons:
- because many of Hamas tunnels were at least 20m underground and explosion damage will extend to at least 30m;
- because in general principle secure foundations require stable soil to at least 2x the depth of the foundations and 3x by EU standards;
- because any rebuilding of Gaza will require high-rise buildings and thus deep foundations due to population density;
- because the situation is globally & historically unprecedented in scale & complexity;
- because some Hamas tunnels extended deeper than 30m;
- because given the sure knowledge that the soil is damaged to at least 30m deep and likely much deeper in places, an extra safety factor must be adopted.
Noting the above factors and because I also haven't modelled the effect of regular bombing or the effects of combat generally, I have adopted a figure of $1 billion per km2, but it could easily be substantially more.
All the calculations can be found in this Grok analysis.
This means that the cost to remediate Gaza's urban areas & 5% of rural areas will be around $174 Billion. Grok estimates the time to do so at up to 40 years but 20 years if a global effort was made to secure the remediation equipment and material required.
It is an unprecedentedly large remediation project because the Hamas military tunnel network is unprecedentedly large and dense.
Summary of Costs Before Re-Building can Start
It is worthwhile to pause at this point and calculate the aggregate costs for cleaning up and rehabilitating Gaza to a point where it is equivalent to regular vacant land: ready to build on, but with no infrastructure.
| Stage | Cost ($Billions) | Time (years) |
|---|---|---|
| De-mine | 1.8 | 15 |
| Demolish | 2 | 2 |
| Clear | 7 | 1 |
| Remediate | 174 | 20 |
| TOTAL | 185 | 38 |
Thus it will cost $185 Billion and take 38 years just to get Gaza to the stage where rebuilding can begin.
In light of this it is worth considering the effective cost of the land versus other options for housing Gazans.
Based on 174 km2 of land (100% of existing urban plus 5% of remediated rural land) what is the price per dunam (1000 m2) for this Gazan land?
How does it compare to the cost of urban land elsewhere in the world?
185/174 = $1.063 Billion per km2 = $1.063 million per dunam.
Based on a 70/30 split between private and public use of land, which is typical for US & Middle East, excluding Israel but low for Europe & Israel (where more land is allocated to public use) this values the cost of producing the private Gazan land at $1,520,000 per dunam.
I asked Grok to do a comparison with vacant unserviced urban land prices elsewhere in the world.
I have extracted the table from its response here and added in the data for Gaza.
| Region | Average Price (USD per dunam) | Notes and Examples |
|---|---|---|
| Israel | 2,300,000 | Based on core urban areas like Modiin and Ashdod; central Tel Aviv zoned land can exceed 18,000,000 USD per dunam, while periphery urban plots are around 540,000 USD. Data reflects development potential in high-demand cities." |
| US | 741,000 | Average for major cities (e.g., San Francisco at ~12,000,000 USD per acre equivalent; Boston and Portland 1–2M USD per acre). Urban vacant land in coastal cities is significantly higher than national farmland averages (~1,075 USD per dunam). |
| Europe | 4,000,000 – 8,000,000 | Limited specific data for vacant unserviced land; estimates derived from development land in major cities (e.g., London ~£5,000–£10,000 per m², Paris ~€6,000–€9,000 per m²). Apartment prices (e.g., Geneva ~17,000 USD per m²) suggest land values are 40–60% of built property costs. |
| Middle East | 585,000 | Based on Dubai urban areas (e.g., Dubai Investment Park and JVC at AED 150–300 per sq ft, averaging ~500 USD per m²). Riyadh and Abu Dhabi are lower (~200–400 USD per m² for similar plots); unserviced plots in emerging areas like Dubai South start at ~300,000 USD per dunam. |
| Gaza | 1,520,000 | Based on cost of demining, clearing, demolition & remediation with a 70/30 private/public land allocation. |
Thus the cost of the de-mining, clearing, demolition and remediation of Gazan urban land is so high that it makes the land amoung some of the most expensive in the world, far more than US or other Middle Eastern land and almost approaching the prices in many Israeli cities, although still far below Tel Aviv prices.
The Economics & Timeline will Drive the Political Solution
These are the basic economic, physical & temporal realities that must be confronted.
It will be vastly cheaper to resettle the Gazans elsewhere and provide them new quality housing just about anywhere else in the world than to attempt to do so in Gaza itself.
The Arab & Muslim States footing the bill for this will have to ask themselves:
- Can they really afford it?
- If so, is it a worthwhile investment for them.
These questions will be examined in Part 2 when the cost of actual rebuilding is recalculated and the resultant cost & sale price per built square meter of coastal apartments is considered on a global basis.
Also given the very long timescales involved in just getting Gaza to the stage where rebuilding can begin, the question arises, where do Gazans live in the interim?
They will not want to live in tents and shacks for 40+ years.
Despite propaganda to the contrary, most Gazans actually had a high standard of living and lived in large, comfortable houses and apartments, many quite luxurious, before October 7.
The Trump Deal gives Gazans the right to leave Gaza (via Egypt) and it is likely that most Gazans will need to be at least temporarily re-housed outside Gaza while these enormously extensive and time consuming pre-building works go on.