Explainer-Why Trump's proposal on Gaza is ringing alarm bells in the region

(Reuters) - President Donald Trump's plan for the United States to take over the war-ravaged Gaza Strip and develop it economically touches on one the most sensitive issues in the Arab-Israeli conflict.

Trump's plans are likely to heighten fears among Palestinians in Gaza, which had a pre-war population of around 2.3 million, of being driven out of the coastal strip, and stoke concern in Arab states that have long worried about the destabilising impact of any such exodus.

WHAT IS BEHIND THE CONCERNS?

Palestinians have long been haunted by what they call the"Nakba", or catastrophe, when 700,000 of them were dispossessedfrom their homes during the war that surrounded the creation ofIsrael in 1948.

Many were driven out or fled to neighbouring Arab states,including to Jordan, Syria and Lebanon, where many of them andtheir descendants still live in refugee camps. Some went toGaza. Israel disputes the account that they were forced out.

The latest conflict, currently paused amid a fragile ceasefire agreement, has seen an unprecedented Israeli bombardment and land offensive in Gaza, devastating urban areas.

Most Gazans have been displaced several times duringIsrael's offensive, launched after the Oct. 7, 2023 attack onIsrael by the Palestinian militant group Hamas that killed 1,200 people, according to Israeli tallies.

More than 47,000 people have been killed in Gaza since then,according to Palestinian health officials.

Hamas official Sami Abu Zuhri said on Wednesday Trump's remarks about taking over Gaza are 'ridiculous' and 'absurd' and could ignite the region.

HOW HAVE PALESTINIANS MOVED DURING THIS CONFLICT?

Before Israel launched its offensive in 2023, it toldPalestinians in north Gaza to move to what it said were safeareas in the south. As the offensive expanded, Israel told themto head further south towards Rafah, on the border with Egypt.

Later in the war, before launching a campaign in Rafah, itinstructed them to move to a new designated humanitarian zone inAl-Mawasi, an area that stretches 12 km (7 miles) along thecoast, starting from the western areas of Deir Al-Balah incentral Gaza to Khan Younis and Rafah in the south.

According to U.N. estimates, up to 85% of the population ofGaza - one of the world's most densely populated areas - havealready been displaced from their homes.

COULD A MAJOR DISPLACEMENT FROM GAZA HAPPEN?

Many Palestinians in Gaza have said they would not leave theenclave even if they could because they fear it might lead toanother permanent displacement in a repeat of 1948.

Egypt and other Arab nations strongly oppose any attempt topush Palestinians over the border. Like Palestinians, they fear any mass movement across the border would further undermine prospects for a "two-state solution" - the idea of creating a state of Palestine next to Israel - and leave Arab nations dealing with the consequences.

Saudi Arabia said it would not establish ties with Israel without the creation of a Palestinian state, contradicting Trump's claim that Riyadh was not demanding a Palestinian homeland.

The United States had led months of diplomacy to get Saudi Arabia, one of the most powerful and influential Arab states, to normalise ties with Israel and recognise the country. But the Gaza war led Riyadh to shelve the matter in the face of Arab anger over Israel's offensive.

From the earliest days of the conflict, Arab governments,particularly Egypt and Jordan, have said Palestinians must not be driven from land where they want to make a future state, which would include the occupied West Bank and Gaza.

WHAT HAVE ISRAEL'S GOVERNMENT AND ITS POLITICIANS SAID?

Israel's then-Foreign Minister Israel Katz, now serving asdefence minister, said on Feb. 16, 2024, that Israel had noplans to deport Palestinians from Gaza. Israel would coordinatewith Egypt on Palestinian refugees and find a way to not harmEgypt's interests, Katz added.

However, comments by some in the Israeli government havestoked Palestinian and Arab fears of a new Nakba. FinanceMinister Bezalel Smotrich has repeatedly called for a policy of"encouraging the migration" of Palestinians from Gaza and forIsrael to impose military rule in the territory.

(Reporting by Maayan Lubell in Jerusalem and Tom Perry inBeirut, Anthony Deutsch in Amsterdam, Tala Ramadan in Dubai, Writing by Edmund Blair and Michael Georgy, Editing by Tomasz Janowski, William Maclean, Giles Elgood, Frances Kerry and Raju Gopalakrishnan)