A Delicate Gamble: The Standoff in Rafah Threatens U.S. Peace Blueprint for Gaza

Economic

Middle East Situation

Summary:

A trapped Hamas unit in Gaza’s tunnels is testing the viability of the U.S.-backed ceasefire plan. Their fate, and how both Hamas and Israel respond...

Underground stalemate disrupts ceasefire implementation

Amid ongoing negotiations between the U.S., Israel, and regional powers over the Gaza ceasefire and future administrative control, an increasingly volatile situation is emerging beneath Rafah. An estimated 100–200 Hamas fighters remain trapped in tunnels within an Israeli-controlled buffer zone known as the "Golden Line." Israeli forces monitor the area intensively, making any surface escape almost impossible.

This enclave of resistance poses a significant challenge to the ceasefire agreement reached in October. For Israel, these militants represent a security threat. For the U.S., their presence is a litmus test: Can Hamas be neutralized without collapsing the fragile ceasefire structure?

A test of diplomacy and strategic patience

According to Joe Truzman of the Long War Journal, the U.S. is walking a diplomatic tightrope. Washington seeks to maintain the truce while appeasing critical intermediaries like Qatar, Turkey, and Egypt. The longer the stalemate persists, the more pressure builds on Israel from international stakeholders.

The Biden administration views itself as the principal architect of Gaza's reconstruction plan one that includes the disarmament of Hamas, deployment of international peacekeepers, and the formation of a new administrative body. Yet this vision is unraveling under the weight of unresolved realities underground.

Israel’s hardened stance on Hamas leverage

Israel suspects that Hamas is using the trapped fighters as bargaining chips to gain concessions, particularly over the return of Israeli hostages. Some remains, like that of Lieutenant Hadar Goldin, have been returned. However, other bodies from the October 7, 2023, attacks remain unrecovered.

Security analyst Kobi Michael argues Hamas intentionally left the fighters behind, possibly as a tactical maneuver to launch future attacks from within Israeli-monitored zones. He dismisses the idea of allowing the fighters to return armed to Hamas-controlled territory, proposing exile to a third country such as Turkey or Egypt as the only tenable option.

A deeper crisis: Hamas refuses to disarm

Truzman notes that the fundamental issue lies not with the fighters in Rafah but with Hamas’s outright refusal to disarm the cornerstone of Washington’s phased roadmap for Gaza. Under this plan, the stages include a major ceasefire and hostage-prisoner exchange, dismantling of tunnels and missile infrastructure, international deployment, and the restructuring of governance without Hamas.

However, implementation remains sluggish, with Israel accusing Hamas of preserving secret command networks and stockpiling weapons. On the ground, Gaza’s administrative vacuum is quickly being filled not by neutral forces, but by Hamas itself.

Rising tensions in the West Bank and Gaza’s shadow state

While the ceasefire temporarily pacifies Gaza, the West Bank is flaring. October saw a record number of Israeli settler attacks on Palestinians. Any misstep in Rafah could cascade into a broader regional escalation.

Meanwhile, in areas vacated by Israel, Hamas has reinstated local governance collecting fees, controlling goods, and influencing markets. Though they deny reimposing taxes, civilians describe fluctuating prices and minimal income, likening conditions to a volatile stock exchange.

Despite enormous losses during the war, Hamas is still paying tens of thousands of security and public sector workers a sign that the organization is entrenching its authority, not relinquishing it. This undermines American ambitions for a Hamas-free Gaza, especially given the impasse in talks between Hamas and Fatah on forming a unity government. Israel, for its part, opposes the Palestinian Authority’s return to Gaza altogether.

A brewing collapse in U.S. peace architecture

The Biden administration’s Gaza plan is facing its most critical test not through rocket fire, but through the silent resistance hidden beneath Rafah. With a post-war administration gridlocked, Hamas refusing to disarm, and Israeli opposition to political reintegration of the West Bank authority, the road to peace appears increasingly elusive.

Unless this underground standoff is resolved with both strategic restraint and coordinated diplomacy, the fragile architecture of U.S. policy in Gaza may collapse setting the stage for renewed conflict on multiple fronts.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data