This looks bad for Palestine. But if it happens the governments of Saudi Arabia and Egypt may pay a heavy domestic price for their part in it.

As the conflict grows in both ferocity and breadth, it has become evident that for many Arab leaders, the Palestinian cause has become a secondary concern, if not a burdensome inconvenience. Arab states that normalized relations with Israel in 2020 – such as the UAE, Bahrain, Morocco, and Sudan – currently view Palestine as an obstacle to their diplomatic flexibility.

There is little doubt that the mass displacement of Palestinians poses a threat to Egypt's national security in the long term. Still, the Saudis and Emiratis appear to be prioritizing this Israeli objective, and so Egypt faces a dilemma:

Either continue to reject displacement or accept a mass exodus to Sinai – even temporarily – in exchange for economic incentives that include offsetting a major part of its accumulated debt, which also threatens the Egyptian economy significantly and, by extension, its social cohesion.

The critical role played by Saudi Arabia and Egypt in shaping post-war Gaza cannot be overstated. Riyadh's embrace of normalization sets a dangerous precedent, fulfilling a long-held US–Israeli desire to integrate the occupation state into West Asia – to the detriment of Palestine.

The reported US offer to wipe out $160 billion of Egyptian debt in exchange for hosting 100,000 Gazan refugees has a dangerous historical precedent. In 1991, Washington forgave Egypt's debt in return for its support of the US-led coalition against Iraq.

Egypt's monumental national debt ranks second globally in risk of default after Ukraine. Notably, Arab countries hold a significant portion of Egypt's debt, with Saudi Arabia and the UAE alone accounting for approximately 20.3 percent...Egypt's looming economic collapse is not in the interest of either the Persian Gulf's Arab states or their US ally due to the country's strategic significance in the Arab world and North Africa...