Despite momentous ceasefire, the path for lasting peace and rebuilding in Gaza is precipitous

WASHINGTON (AP) — On Monday, the fragile ceasefire in Gaza led to freedom for Israeli hostages and the release of Palestinian prisoners held by Israel. It was the culmination of a long and tortuous process — but it may, in the end, have been the easier part.

The coming weeks, months and years will require more than just rebuilding from the devastation that has left much of Gaza in ruins. Key details of the peace plan may remain unsettled. Granular details will need to be negotiated to keep the plan moving forward and prevent the resumption of fighting. The path to long-term peace, stability and eventual rebuilding will be a long and very precipitous route.

“The first steps to peace are always the hardest,” President Donald Trump said as he stood with foreign leaders in Egypt on Monday for a summit on Gaza’s future. He hailed the ceasefire deal he brokered between Israel and Hamas as the end of the war in Gaza — and start of rebuilding the devastated territory.

And while Trump expressed optimism that the most challenging part was over — “Rebuilding is maybe going to be the easiest part. I think we’ve done a lot of the hardest part because the rest comes together" — others were more tentative about the intricacies that lie ahead.

“Peace has to start somewhere," said Mona Yacoubian, director of the Middle East Program at the Center for Strategic and International Studies. She called it an important and “euphoric moment."

But, Yacoubian warned, “Unfortunately, I think there are several potential points of failure going forward.”

As publicly presented, the plan brims with unanswered questions.

How and when Hamas is to disarm, and where its arms will go, are unclear, as are plans for Israel’s withdrawal from Gaza. A new security force is to be established for Gaza, made up of troops from other nations, but it is not known which countries will send forces, how they will be used and what happens if they encounter resistance. It’s also not clear who will staff a temporary governing board for Gaza, where it will be located and how the population will respond.

To settle those details and keep fighting from returning, the United States and other nations that pushed to reach the ceasefire must continue to exert pressure and devote attention, experts say.

All of that is layered atop a legacy of conflict, deep distrust among the sides and a vague, conditional possibility of an eventual Palestinian state — an issue that has been a core sticking point for decades. “When you realize how far things have to go for that current pause to be sustained, that’s where I think it does become very daunting,” Yacoubian said.

Since the war began with Hamas’ attacks on Israel on Oct. 7, 2023, two other ceasefires have come and gone without any progress beyond temporary pauses in fighting and limited exchanges of hostages and prisoners. With Hamas demanding a permanent halt to the fighting and Israel demanding the release of all hostages, talks on postwar arrangements never got off the ground. Those positions began to change after Trump’s reelection as he leveraged his power and relationships — both with Israel and Arab mediators with sway over Hamas — to push things forward.

Despite the enthusiasm for this latest deal, there are reasons for skepticism, not least of which being that U.S. attempts to bring about an end to the Israeli-Palestinian conflict have failed for decades.

Starting with the 1991 Madrid Conference and moving through various iterations — including the landmark Oslo Accords in 1993 and 1995, which created the Palestinian Authority — all the efforts to restart the process through 2014 collapsed.

Lucy Kurtzer-Ellenbogen, a senior fellow with the Middle East Institute, said the current ceasefire is “a welcome and meaningful but fragile pause.” Now, she said, it’s a question of “whether or not it fully collapses and just serves as a chance for both sides to regroup, rather than a launching pad for progress on these issues. That’s going to depend on President Trump and the other actors he’s coordinating with staying with it.”

In the peace proposal brokered by the Trump administration, it remains unclear to what degree agreements have been reached on two of the biggest sticking points: the extent of Israel’s withdrawal and the extent of Hamas’ retreat from power. Israel remains in control of roughly half of Gaza.

Prime Minister Benjamin Netanyahu was careful Monday to say he is “committed” to Trump’s peace plan, but he has not declared the war over. Over the past two years he repeatedly vowed to achieve “total victory” over Hamas.

Hamas, while weakened after two years of war, is far from being out of governance and fully disarmed as Netanyahu sought. He relies on hardline coalition partners that oppose an end to the war, and by declaring it over, Netanyahu could see his government crumble and be forced into an early election at a time when his popularity remains low and his war goals unfulfilled. The next election is scheduled next October.

It also remains unclear who will oversee it all on a so-called “Board of Peace,” which Trump said he will chair. Despite Trump’s plan announcing that former British Prime Minister Tony Blair would help head the board, the president on Sunday made that sound tentative, too. The Palestinians have expressed displeasure over Blair’s possible involvement.

“I like Tony. I’ve always liked Tony, but I want to find out that he’s an acceptable choice to everybody,” Trump told reporters as he flew to Israel.

Settling all those details comes against the backdrop of the Gaza Strip needing “massive rehabilitation,” Kurtzer-Ellenbogen said, and a population that has undergone unremitting physical and psychological trauma.

Tens of thousands of Palestinians have been killed. More than 90% of Gaza’s population of more than 2 million people is displaced. The medical system is shattered. Homes and buildings are flattened. Croplands are razed. Hunger is pervasive.

Those urgent needs will need to be addressed while simultaneously standing up the transitional security and government systems. “There’s really no luxury of sequencing here,” Kurtzer-Ellenbogen said. “Everything has to happen all at once."

The World Bank, the United Nations and the European Union estimated earlier this year that the cost of rebuilding Gaza would be about $53 billion. Wealthy Arab states are expected to help with that cost, but that buy-in is expected to be met by reassurances that there will be a pathway to Palestinian independence and there will not be a return to fighting. The biggest sticking point is a Palestinian state, which Trump’s plan holds out as a possibility only after a lengthy transition period in Gaza and reform process for the Palestinian Authority. It's something Netanyahu and his partners oppose.

Yacoubian said the agreement struck by Trump’s administration seemed “purposely very vague” on the issue of Palestinian statehood. It seemed designed, she said, to “thread the needle between the minimum that the Palestinians and their Arab supporters will accept” without mentioning a “two-state solution,” which seems to remain a nonstarter for Israel.

On his way back to the U.S. on Monday night, Trump pushed aside questions about an independent Palestinian state and told reporters that was separate from his plan for rebuilding Gaza.

“A lot of people like the one-state solution. Some people like the two-state solution. We’ll have to see," Trump said.

He went on and added: “At some point I’ll decide what I think is right, but I’d be in coordination with other states and other countries."

Robert Wood, the deputy U.S. ambassador to the United Nations during the Biden administration, cast several vetoes on U.N. Security Council resolutions calling for immediate ceasefires in Gaza. He said the next phase is going to be difficult and “is going to require a tremendous amount of work.”

“The administration needs to stay engaged, particularly at the highest levels, if this has a chance of working,” Wood said. “It’s a good day, but the war isn’t over yet.”

Associated Press writers Matthew Lee in Washington, Josef Federman in Truro, Massachusetts and Darlene Superville aboard Air Force One contributed to this report.

President Donald Trump holds a signed document during a summit to support ending the more than two-year Israel-Hamas war in Gaza after a breakthrough ceasefire deal, Monday, Oct. 13, 2025, in Sharm El Sheikh, Egypt. (Suzanne Plunkett/Pool via AP)

President Donald Trump and United Nations Secretary-General Antonio Guterres pose during the greeting ceremony before the family picture at the Gaza International Peace Summit, in Sharm el-Sheikh, Egypt, Monday, Oct.13 2025. (Yoan Valat, Pool photo via AP)

People wave Israeli flags and spray foam in celebration after the arrival of freed hostages at Beilinson Hospital in Petah Tikva, Israel, following their release from Hamas captivity in the Gaza Strip, Monday, Oct. 13, 2025. (AP Photo/Francisco Seco)

People gather to greet freed Palestinian prisoners arriving on buses in the Gaza Strip after their release from Israeli jails under a ceasefire agreement between Hamas and Israel, outside Nasser Hospital in Khan Younis, southern Gaza Strip, Monday, Oct. 13, 2025. (AP Photo/Abdel Kareem Hana)

NEW YORK (AP) — With no clear end in sight, the war with Iran is sending oil prices back to $100 per barrel, and stocks are sinking worldwide on Thursday.

The S&P 500 fell 1.2% and is returning to big swings following a couple days of relative calm. The Dow Jones Industrial Average was down 607 points, or 1.3%, as of 11 a.m. Eastern time, and the Nasdaq composite was 1.7% lower.

The center of action was again the oil market, where the price of a barrel of Brent crude, the international standard, got as high as $101.59 overnight before pulling back to $100.44, a 9.2% rise. Worries are worsening that the war could block the production of oil in the Persian Gulf for a long time and cause a debilitating surge of inflation for the global economy.

Iran's new supreme leader released his first statement Thursday since succeeding his late father, saying his country would keep up attacks on Gulf Arab neighbors and use the effective closure of the Strait of Hormuz as leverage against the United States and Israel. A fifth of the world’s oil typically sails through the strait, and oil producers in the region are cutting production because their crude has nowhere to go.

Countries around the world are trying to make up for that, and the International Energy Agency said Wednesday that its members would release a record amount of oil, 400 million barrels, from their stockpiles built for such emergencies.

But such moves are short-term fixes, and they do not clear the long-term risks. Analysts have said that if the Strait of Hormuz remains closed, oil prices could jump to $150.

To be sure, the U.S. stock market has a history of bouncing back relatively quickly from military conflicts in the Middle East and elsewhere, as long as oil prices don't stay too high for too long. Even with all the up- and- down swings of the last couple weeks, many rocking markets hour to hour, the S&P 500 is still just roughly 4% below its all-time high set in January.

What’s made this jump for oil prices frightening is not only the degree — prices jumped near $120 earlier this week to their highest level since 2022 — but that they’re also occurring during an uncertain time for the economy.

Last month’s report on hiring by U.S. employers was surprisingly weak, which raised worries about a possible worst-case scenario for the economy called “stagflation.” That’s one where economic growth stagnates while inflation remains high. And it's a miserable mix that the Federal Reserve has no good tools to fix.

A more encouraging signal arrived Thursday. A report said that the number of U.S. workers applying for unemployment benefits inched lower last week. That’s a sign that layoffs are potentially remaining low around the country.

Dollar General, meanwhile, reported better profit and revenue for the latest quarter than analysts expected. But the retailer with relatively low prices, whose customers often have the least cushion to absorb higher gasoline prices, gave forecasts for revenue this upcoming year that indicated a slowdown in growth. Its stock fell 5.8%.

Some of the worst losses on Wall Street again hit companies with big fuel bills. United Airlines sank 3.9%, and cruise-ship operator Carnival fell 5.7%.

Worries about the private-credit industry continued to hurt the market. Investors have been rushing to pull their money out of some funds and companies that have lent to businesses whose profits are potentially under threat. Many of the worries are focused on business that could be made obsolete by new AI-powered rivals and may not pay back their loans.

Morgan Stanley fell 4% after its North Haven Private Income fund said it allowed investors to redeem only 5% of its total shares instead of the nearly 11% they had requested. That 5% cap is the advertised limit.

In stock markets abroad, indexes fell across Europe and Asia.

Japan’s Nikkei 225 dropped 1%, and France’s CAC 40 sank 0.9% for two of the world’s bigger moves.

In the bond market, Treasury yields continued to climb because of upward pressure from rising oil prices. The yield on the 10-year Treasury rose to 4.24% from 4.21% late Wednesday and from just 3.97% before the war started.

Higher yields help make all kinds of borrowing more expensive, such as mortgages for potential U.S. homebuyers and bond offerings for companies looking to expand. They also push down on prices for all kinds of investments, from stocks to crypto.

Because of the spike for oil prices, traders have pushed back forecasts for when the Fed could resume its cuts to interest rates. President Donald Trump has been angrily calling for such cuts, which would give the economy and job market a boost but also potentially worsen inflation.

A barrel of benchmark U.S. crude rose 10.1% to $96.12.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

An earlier version of the story incorrectly reported the percentage drop for United Airlines’ stock.

Gregg Maloney works on the floor at the New York Stock Exchange in New York, Tuesday, March 10, 2026. (AP Photo/Seth Wenig)

Gas prices are displayed at a station Wednesday, March 11, 2026, in Evanston Ill. (AP Photo/Erin Hooley)

Pedestrians mill about outside the New York Stock Exchange in New York, Friday, March 6, 2026. (AP Photo/Seth Wenig)

The New York Stock Exchange is seen in New York, Friday, March 6, 2026. (AP Photo/Seth Wenig)

Traders work on the floor at the New York Stock Exchange in New York, Tuesday, March 10, 2026. (AP Photo/Seth Wenig)