Phase Two of the Hostage Deal: What Happens Next?

Israel and Hamas are nearing completion of “Phase 1” of the January 19 ceasefire and hostage release deal, and what will happen next remains shrouded in mystery. 

An estimated 27 living hostages and an estimated 32 bodies of murdered hostages remain in captivity. Furthermore, the Hamas terror organization remains armed and in control of Gaza, and both Israel and Hamas are expressing opposing demands for which there is no possible compromise. But the world has changed since October 7, 2023, and the way forward may offer an unexpected new option.

The deal with Hamas was designed to occur in three phases: 1. Release of Israeli women, children, and elderly hostages in exchange for the release of Palestinian terror convicts held in Israeli prisons, as well as Israeli withdrawal from certain parts of Gaza, 2. Release of all remaining hostages in exchange for permanent and complete Israeli withdrawal from Gaza, and 3. Rebuilding Gaza.

In effect, the only way to proceed to Phase 2 is for Israel to allow Hamas to remain in power and to be the beneficiary of massive amounts of international aid, thus almost certainly ensuring another October 7 style attack will lie in Israel’s future. Israel is determined to not permit such an outcome, and Hamas is determined to not settle for anything less.  

While the Israeli government has been tight lipped about its plans (perhaps because no decision has yet been reached), one anonymous official leaked the following:

Hamas has three choices.

1. Disarm, send its leaders into exile, and give up any civil control over Gaza, thus releasing the hostages and ending the war.
2. Continue releasing hostages in the style of Phase 1, and thus extend the ceasefire for now.
3. Return to war. 

The Israeli official added that if there isn’t an agreement or another release of hostages by March 8, then war will resume. 

It is unlikely that Hamas would choose option #1 (exile), which leaves option #2 (ongoing hostage release), option #3 (war), or Hamas’s demand for total Israeli withdrawal.

Some Israelis suggest that Israel agree to Hamas’ terms as a kind of ruse, and then, once all the hostages are released, to violate the deal and return to war.Yet Hamas is not unsophisticated and will almost certainly maintain leverage over Israel: either by finding an excuse to hold back some hostages indefinitely, or else by some international mechanism that would succeed in tying Israel’s hands.

Other Israelis insist on agreeing to Hamas’ demands and paying “any price” for the return of the hostages, even if that price results in future terror attacks, future hostages, and future bloodshed for even more Israelis. Still others point out, quite correctly, that in 16 months of war, Israel has not fully accomplished any of its goals: as both Hamas remains in power, and Israeli hostages remain in Gaza. 

Yet much has changed in recent months, and if Israel were to return to war, it would be prosecuted differently. Israel has been compelled to essentially fund both sides of this war, effectively providing fuel, electricity, and humanitarian supplies to Hamas. Hamas habitually stole these supplies and used them in two ways: 1. to directly support its fighters and fuel its rockets, or else 2. by selling supplies to civilians in order to raise funds for its military activities. This tactic also ensures Hamas’ ongoing popularity among the populace, as the terror group remains the sole source of food and supplies. Furthermore, international pressure greatly limited Israel’s ability to strike when and how it wished, to use certain weapons, or even to relocate Gaza’s civilians out of harm’s way, thus forcing Israel to fight through human shields.

Israel now has far greater support from the United States for aggressive action, including moving civilians out of Gaza. Such an approach would leave Gaza a total military zone, where Israel would have nearly unlimited freedom of action, and there would be no need for humanitarian aid, as there would be no civilian population to receive it. Moving civilians has proven highly effective over the past 16 months despite international doubts. For example, shortly after US Vice President Kamala Harris opposed moving civilians out of Rafah last March, claiming, “I have studied the maps, there’s nowhere for those folks to go,” Israel proved her wrong, moving a million people in just 10 days. Similar movements were accomplished out of Jabalya, Khan Yunis, and Gaza City.  

It is also likely that, regardless of the fate of Hamas, Israelis will never be truly safe unless all Palestinians are relocated out of Gaza. Formerly an extreme right wing opinion, this notion is now the mainstream Israeli consensus across the entire political spectrum, with widespread support from almost all Israeli Jews (left, right and center) as well as nearly half of Israeli Arabs.

The impediment to moving Palestinians out of Gaza is therefore not the ability to physically move them, nor Israeli domestic opinion, nor international law which explicitly permits such movements, but rather the refusal of the Arab world to accept Palestinians under any circumstances. 

Yet America has significant leverage over Egypt and Jordan, and has recently demonstrated a newfound openness to actually using it. For example: a mostly forgotten bit of history is that the Arab Spring (and the resulting overthrow of Egypt’s government) actually began when Russia stopped providing low cost wheat exports in 2011, thus spiking the price of bread within Egypt, and triggering the famous protests in Tahrir Square. This example demonstrates just how fragile certain middle eastern economies actually are. The United States, which provides billions of dollars of aid to Egypt and Jordan, can trigger similarly crippling economic effects with the stroke of a pen, thus endangering the very existence of entire countries without firing a shot.

Israelis are caught in a paradox: on the one hand wanting all hostages home, and on the other, wanting to fight for a safer reality on Israel’s southern border. The most likely outcome is that Phase 1 will informally continue, with ongoing hostage releases in exchange for ongoing ceasefire, until Hamas decides that the risk of no longer holding hostages is greater than the risk of imminent war. At that point, we will likely see a re-eruption of war in Gaza, but of a vastly different and more effective character than we have seen up until now.  

One can only imagine how much bloodshed would have been spared on all sides, and how much more quickly the hostages might have come home, had Israel received the international support it both needed and deserved 16 months ago.

Daniel Pomerantz is the CEO of RealityCheck, an organization dedicated to deepening public conversation through robust research studies and public speaking.

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