Overview
While the first phase of implementation—hostage return—saw initial success, delays have prompted renewed (but not yet ceasefire-breaking) violence, and future stages promise friction as the parties remain fundamentally misaligned on issues like Hamas’ disarmament. With renewed violence threatening regional destabilization, the ceasefire’s success will impact sectors including oil and gas, logistics, and the global economy as a whole. The October 2025 Gaza ceasefire agreement, brokered by US President Donald Trump, represented a watershed moment in the Israeli-Palestinian conflict. Announced on October 8 and formally signed in Sharm el-Sheikh, Egypt, on October 13, this 20-point plan has drawn widely divergent responses from Israel, Hamas, the US, and Arab states.
Israel's Calculus
For Israel, the Trump deal represents both achievement and compromise. After achieving its major military objectives in Iran, Lebanon, and Gaza, Prime Minister Benjamin Netanyahu's government faced mounting popular pressure to end a conflict that had killed over 67,000 Palestinians and devastated Gaza. In the past, Netanyahu had clearly opposed the establishment of a Palestinian state and criticized countries that had "foolishly" recognized one, making his acceptance of the agreement—which outlines a “credible pathway” to Palestinian statehood—particularly significant.
The calculus that drove Netanyahu to accept the deal centers on the return of hostages and the degradation of Hamas's military capabilities. The first phase delivered tangible results: Hamas released the last 20 living Israeli hostages who had been captive for just over two years, while Israel freed nearly 2,000 Palestinian prisoners and detainees. Netanyahu framed this as vindication of his military strategy, though critics note that Israel could have achieved similar outcomes far earlier with less destruction and argue that the text of the deal is largely similar to earlier, rejected proposals. Trump’s intervention may have allowed Netanyahu to circumvent the competing priorities of his conservative cabinet, which has pressed for maximalist gains, and rising domestic and international pressure.
However, implementation reveals Israel's deeper anxieties. The IDF has withdrawn to the agreed-upon lines and will remain there only as long as it considers Hamas is fully implementing the agreement. This conditional withdrawal reflects Israel's fundamental distrust of Hamas' intentions and its determination to maintain leverage throughout the process. Events of recent days—the slow release of remains of 13 Israeli hostages and the firing of anti-tank rockets at IDF troops in Gaza—are viewed by Israel as violations, and have prompted intensified Israeli airstrikes in and around Gaza City. In its understanding, Israel apparently envisions a post-ceasefire arrangement in Gaza akin to its posture toward Lebanon and Syria—a ceasefire on paper, but with latitude for the IDF to continue strikes as needed to prevent imminent threats or Hamas’ reconstitution. The second phase, which addresses Hamas' disarmament, remains the critical test of Israeli security concerns. Netanyahu's government has made clear that it views complete demilitarization as non-negotiable, even as questions persist about who will enforce this requirement.
Hamas's Repositioning
Hamas' acceptance of the Trump plan represents a dramatic tactical shift, though not necessarily an ideological transformation. Hamas agreed to release the remaining hostages and "hand over the administration of the Gaza Strip to a Palestinian body of independent technocrats," though it did not agree to disarm or forgo influence in Gaza. This careful formulation preserves Hamas' political identity while acknowledging its diminished capacity after two years of devastating conflict.
The organization's calculation appears rooted in survival rather than surrender. Senior Hamas leaders made clear the group does not believe it lost the war, framing the agreement as a victory for Palestinian resistance. Hamas' implementation strategy focuses on the immediate: securing the ceasefire, facilitating humanitarian relief, and maintaining political relevance through governance transfer rather than military control.
Yet internal divisions complicate implementation. While Hamas' political leadership in Qatar proved receptive to the deal, Hamas' leader in the Gaza Strip, Izz al-Din al-Haddad, reportedly had objections. This split between external leadership and ground commanders threatens coherent implementation. The question of disarmament looms largest—Hamas' willingness to release hostages does not necessarily translate into readiness to surrender weapons that define its identity as a resistance movement.
Trump’s Gamble
For the Trump administration, the Gaza deal serves multiple strategic and political objectives. Trump positioned himself as the indispensable dealmaker, declaring that "this regional reset would be impossible without one essential ingredient,” that being himself. His interventions--including threatening Hamas with "complete obliteration" while simultaneously pressuring Israel to halt operations—embodied his transactional approach to Middle East diplomacy.
The administration's implementation strategy reveals broader regional ambitions. Trump seeks to expand the Abraham Accords, most dramatically through normalization between Israel and Saudi Arabia, with the Saudis placing two conditions on the table: an end to the fighting and a credible path toward Palestinian sovereignty (and maybe a mutual defense pact). The success of the Gaza agreement thus functions as a prerequisite for transforming regional architecture, with Trump envisioning comprehensive peace deals that would cement his foreign policy legacy.
The administration faces significant implementation challenges. Trump's team, including Vice President JD Vance and advisors Jared Kushner and Steve Witkoff, has focused on reconstruction planning to maintain momentum. Yet sustained presidential engagement remains uncertain, and the success of subsequent phases depends entirely on Trump's willingness to pressure both parties equally—a commitment that conflicts with his instinct to prioritize relationships with Netanyahu and Gulf Arab leaders.
Nonetheless, while US-Israel engagements around the implementation of Trump's Gaza peace plan have been characterized by public cooperation, they have also been coupled with underlying tensions over specific terms of implementation. These divisions reveal complexities beneath the surface and demonstrate Trump's willingness to apply pressure on Israel to remain in the deal, not shying away from exposing existing disagreements with, or distrust of, Netanyahu publicly. See, for example, Trump’s move to force an Israeli apology to Qatar following Israel’s shock airstrike on Hamas negotiators in Doha—despite a foreign policy doctrine that historically embraced a no-limits partnership with Jerusalem—showcasing Trump’s willingness to leverage the attack to make clear American disapproval and up the pressure for an agreement.
Arab States Hopeful Yet Skeptical
Arab states, particularly Egypt, Qatar, Saudi Arabia, and the other Gulf monarchies, played crucial mediating roles while pursuing diverse interests. Egyptian President Abdel Fattah el-Sisi called the agreement "the birth of a glimmer of hope" for the region, reflecting Egypt's exhaustion with managing the Gaza crisis on its border and its desire to restore stability.
The triggering event for broader Arab engagement proved telling. The Israeli attack on Doha, which violated Qatar's territorial integrity in a failed attempt to kill Hamas negotiators, galvanized Arab states to support the peace process more actively. This incident demonstrated the risks of conflict escalation and the need for diplomatic resolution. Additionally, more maximalist positions from Washington and Jerusalem—such as Trump’s “Riviera” plan and rumors of West Bank annexation plans—sparked more active engagement.
Arab implementation priorities center on humanitarian reconstruction and political stabilization. Arab countries have maintained close commercial and diplomatic ties to Trump, leveraging these relationships to shape the agreement's terms. For Saudi Arabia specifically, Palestinian sovereignty remains essential for broader normalization with Israel. The Kingdom views the Gaza deal as testing whether Trump can deliver meaningful political outcomes for Palestinians beyond mere humanitarian relief. Crown Prince Mohammad bin Salman will visit Washington next month and is expected to reinforce this message. The Crown Prince is also expected to raise the issue of additional US security guarantees for the kingdom, a powerful potential bargaining chip for the White House.
However, Arab states face their own constraints. None wishes to assume direct governance of Gaza or host Palestinian refugees long-term. Trump's Riviera proposal proved "unthinkable on several grounds" for Arab countries expected to host millions of Gazans during reconstruction. Instead, they envision an international peacekeeping force and technocratic Palestinian administration arrangements that require sustained international commitment, which is currently uncertain.
What’s Next: Moving to Stage 2 on an Unstable Foundation
The October 2025 Gaza agreement represents a genuine diplomatic achievement in ending active conflict and securing hostage releases. Yet implementation reveals fundamental divisions and near-term challenges: Israel demands Hamas' complete disarmament while Hamas maintains it has not been defeated. Trump seeks regional transformation but may lack patience for sustained US engagement. Arab states offer mediation but resist direct responsibility for Gaza's future.
All parties, to differing extents, appreciate the ceasefire for providing regional stability and calm to Middle Eastern markets. For Gulf Arab states, stability in the name of prosperity is a foreign policy guiding light, and renewed violence threatens disruptions for all. Although the direct spillover of the Gaza conflict has historically been limited for global markets, geopolitical disruption in the region has traditionally impacted oil and gas prices, dampened Gulf growth, and inflamed violence elsewhere—including Houthi attacks in the Red Sea—that have complicated global logistics. On the other hand, strong progress for the ceasefire will bring with it upside risks for Arab-Israeli economic ties, and new opportunities for involvement in reconstruction.
Early violations illustrate the agreement's fragility. The second phase, addressing permanent ceasefire terms, governance structures, and demilitarization, will test whether tactical convergence can produce strategic peace. During his trip to East Asia this week, Trump stated that implementation of Phase Two of the plan will begin soon, indicating he remains strongly committed to achieving lasting success for the region. Success depends less on the agreement's text than on whether each party finds continued implementation more valuable than renewed conflict—a calculation that remains, at best, uncertain.
