Arab leaders have adopted a proposal that would allow Palestinians in the Gaza Strip to stay in place. But the plan faces major obstacles because Israel has criticized it and it lacks details on funding for the costly project.

The initiative was endorsed at a summit of the League of Arab States in Egypt on Tuesday. It is an alternative to US President Donald Trump's suggestion that residents in Gaza resettle elsewhere.

The Arab plan envisions reconstructing Gaza over a five-year span in phases, initially by removing rubble and building temporary housing units. This would be followed by constructing an airport and seaports. The project is estimated to cost 53 billion dollars.

Islamic group Hamas responded with a statement saying it welcomes the Gaza reconstruction plan and calling for all the elements for its success to be provided.

Meanwhile, the Israeli foreign ministry said on X that "with President Trump's idea, there is an opportunity for the Gazans to have free choice based on their free will."

It added, "Instead, Arab states have rejected this opportunity, without giving it a fair chance."