The initiative, driven by Jared Kushner, Donald Trump's son-in-law and White House adviser, was billed by the US president as the 'deal of the century'
The US blueprint to end the conflict between Israel and the Palestinians, still in draft form after almost two years, is seen by Palestinians, and by some Arab officials and politicians, as a plan to finish off the Palestinian cause.
The initiative, driven by Jared Kushner, Donald Trump's son-in-law and White House adviser, was billed by the US president as the "deal of the century."
While its precise outlines have yet to be revealed, Palestinian and Arab sources who have been briefed on the draft plan say Kushner has jettisoned the two-state solution - the long-standing US and international formula that envisages an independent Palestinian state alongside Israel in the West Bank, east Jerusalem and Gaza.
After several postponements, Washington plans a first formal outing of the economic components of the plan at a "Peace for Prosperity" workshop in June in Bahrain.
The plan faces possible delays due to political upheaval in Israel, where Prime Minister Benjamin Netanyahu must fight another election after failing to form a government.
Kushner and Trump, with backgrounds in real estate rather than diplomacy, seem to be approaching this hitherto insoluble conflict as a transaction, three Arab officials briefed on the plan said.
If the politics keep failing, the reasoning seems to be, then try dangling tens of billions of dollars before the Palestinians and Israel's Arab neighbours – and do a deal that could unlock prosperity for the Palestinians and security for Israel, these officials said.
Politically, the deal envisages an expansion of Gaza into part of northern Egypt, under Egyptian control, Palestinian officials briefed on the plan told Reuters. Palestinians would be left with a smaller share of the West Bank and some areas on the outskirts of Jerusalem and no control over their borders. Western and Arab sources confirmed the outline of the plan.
Jason Greenblatt, Trump's Middle East envoy, said "rumours" about an expansion into Egypt's Sinai desert were false. He declined to give details of the political plan before it is released.
On the decision not to use the term "two-state solution", Greenblatt said: "We believe that using certain phrases and labels is not helpful because they lack detail and nuance – they mean different things to different people. The detailed plan, once released, will show what we think may be best solution for the two parties."
Not buying it
The Palestinians are not buying it.
"What we're seeing from the plan is that it will blow up the Palestinians," one Arab official told Reuters. "The plan doesn't give justice to the Palestinians."
"The Palestinian cause is being liquidated - no Jerusalem as capital, no right of return for refugees, no sovereign state. That is why this American project is dangerous," one senior Palestinian leader told Reuters.
The deal as outlined so far has been dismissed by President Mahmoud Abbas' western-backed Palestinian Authority in the Israeli-occupied West Bank.
Abbas has boycotted political dealings with the Trump administration for 18 months. This followed Trump's decisions in 2017 to recognise Jerusalem as Israel's capital and move the US embassy there from Tel Aviv.
Since then, the Trump administration has curtailed aid to the Palestinian Authority, shuttered the Palestine Liberation Organisation (PLO) delegation in Washington and cut off finance to UNRWA, the UN agency supporting Palestinian refugees. Washington meanwhile endorsed Israel's sovereignty over the Golan Heights.
"In practice they have already started implementing 'the deal of the century'," the senior Palestinian leader said, "on the ground, step by step." "Today, the two-state solution has been scuttled."
Abbas is not alone in his view of the US deal.
It was rejected by the Islamist Hamas movement, which does not recognise Israel's right to exist and has only given conditional consent to a state in the occupied Palestinian territories.
The PLO has dismissed the Kushner effort as an attempt to bribe Palestinians into accepting Israeli occupation of the West Bank, a prelude to Israel annexing about half their territory and leaving them with scattered cantons.
Hanan Ashrawi, a moderate Palestinian leader, tweeted that the Kushner plan and the Bahrain conference were just "a handout to make our captivity palatable."
Palestinian businessmen have opposed the Bahrain gathering despite a plea by Washington to attend, saying their political demands must be addressed in any peace plan.
Qatar said economic prosperity cannot be achieved without political solutions acceptable to Palestinians. Oman said anything that precludes the establishment of a Palestinian state will not be acceptable.
"We are not proposing an economic peace," Greenblatt said. "We know that is not acceptable to the Palestinians. We've been very clear that the full plan includes a political component as well. But the economic plan is an essential component to the full plan."