ACCEPTED finally by both Hamas and Israel, the ceasefire in Gaza is the effective outcome of the US administration’s maximum pressure on Hamas and its embrace of the positions of several Arab states, particularly Qatar, Egypt, and Turkey.
But the end of hostilities represents barely the first of the three phases presumably proceeding from ceasefire in Gaza to peace in the Middle East. The devil is in the details, and the hardest talks loom ahead.
Here’s why: the complicated, multi-phase plan is riddled with caveats because the old U.S. approach to the Middle East is crumbling.
America’s military hegemony
Since 1945, the U.S. hegemony in the Middle East has relied on oil buys, weapons sales, and regime change. In diplomacy, Washington has favored bilateral peace treaties between Israel and Egypt (1979) and Jordan (1994) and the Oslo Accords with the Palestinian Authority (1993-95).
Since his first administration, President Trump has built on the Abraham Accords (2020-21), a series of bilateral agreements to normalize relations among Israel and several Arab states, led by the United Arab Emirates (UAE) and Bahrain. With massive oil buys from and arms sales to Riyadh, the U.S. goal is to have Saudi Arabia join the Accords.
But arms sales are the key to America’s hegemony. In the case of its allies, the U.S. provides 60 to 80 percent of their lethal imports (Israel, Kuwait, Saudi Arabia). In the rest, it accounts for 50 to 60 percent of the total (UAE, Iraq, Qatar), followed by Egypt.
Additionally, American hegemony relies on aid dependency. Between 1946 and 2023, Washington provided a whopping $373 billion in foreign assistance to the Middle East. Before the Gaza catastrophe, the bulk of the aid was steered to just a few countries: Israel ($139 billion), Egypt ($83-B), Iraq ($70-B), and Jordan ($24-B).
Since the Middle East is the largest regional recipient of U.S. aid, the impact should be reflected in increasing security and rising per capita income. Yet, the net effect has been precisely the reverse, as evidenced by the region’s “forever conflicts” and periods of historical economic stagnation.
Extensive periods of stagnating living standards
Worse, the military symbiosis between the U.S. and Israel has triggered huge adverse spillovers to adjacent Arab states. These severe destabilizations have been accompanied by lost years, even decades, with no increase in per capita incomes in these states.
Egypt coped with such stagnation in 1965-75 and again in the early 2010s. Jordan lost a decade after the 1967 Six-Day War, during the first Palestinian uprising in the 1980s, and again in the early 2010s. Even Israel hasn’t been immune to stagnation periods, as evidenced by past economic crises, the highest income polarization among OECD countries, and the huge cost-of-living protests after the failure of the peace process.
In Iran and Iraq, adversities have escalated since their 1980-88 war, in which the U.S. supplied arms to both sides. In Iraq, where the U.S. had backed the 1963 coup, per capita income in 2010 was where it had first been in 1978, over three decades before. In Iran, which suffered the first U.S.-UK regime change in 1953, U.S. sanctions prevented gains in per capita income for a quarter of a century after the Islamic Revolution and again in the 2010s.
Following the 1949 U.S.-led regime change, Syria’s democratic path was undermined until 2025. As a result, Syrian per capita income before October 7, 2023, is where it was last in 1981; that is, 44 years ago. In Palestine, per capita income is now where it was in the early 1970s, half a century ago. And in Yemen, per capita income is where it was 55 years ago.
China-led development
In the past decade, China has emerged as a credible and peaceful intermediary in the Middle East. In addition to investing significantly in countries burdened by decades of U.S. interference and regime change, Beijing has achieved several diplomatic coups.
Major regional Arab states, including Egypt, Saudi Arabia, and Turkey, build on the China-led Belt and Road Initiative (BRI).
Saudi Arabia has joined the BRICS alliance, remains one of China’s largest oil suppliers, and is selling oil in multiple currencies. For decades, U.S. administrations fostered divides between Saudi Arabia and Iran. Yet, in March 2023, these two countries resumed relations after a China-brokered deal.
In July 2024, China played a vital role in fostering Palestinian national unity in the Beijing Declaration, signed by 14 different Palestinian factions.
In August 2024, Beijing established a Second Silk Road in the region. In July 2025, China and Egypt expanded their bilateral cooperation across various economic sectors.
For years, China has called for and worked for de-escalation, sustained peace, and development in the region.
Surely the Middle East is large enough for both great powers – as long as the presence of each is predicated on diplomacy and peacemaking rather than abject obliteration.
Catastrophic economic and human costs
Since 1945, Washington has relied on destabilization and regime change in the Middle East to maintain its hegemony in the region. The post-9/11 wars alone have cost over $8 trillion and the lives of more than 1 million people.
In the past, US military aid to Israel amounted to $3.8 billion per year; since October 7, 2023, it has soared to $22 billion. In Gaza and Yemen, it has made the US complicit in genocidal atrocities.
In 2023-25, a quarter of a million Palestinians — mainly women and children — have been killed or wounded in Gaza, while more than 5.3 million people in the region have been displaced in Israel’s post-October 7 atrocities.
These catastrophic performances can be compared and contrasted with Chinese initiatives focusing on de-escalation and stabilization, particularly on investment, development, and modernization, which are hugely attractive in the Middle East.
The region has lost decades in self-defeating wars that have benefited primarily global defense contractors in the West. The time for decisive economic development, led by China and the Global South, has arrived, also in the Middle East.
Obliteration wars are no solution to 21st-century challenges.
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The author of The Obliteration Doctrine (2025) and The Fall of Israel (2024), Dr Dan Steinbock, a strategist of the multipolar world, is the founder of Difference Group and has served at the India, China, and America Institute (US), Shanghai Institute for International Studies (China), and the EU Center (Singapore). For more, see https://www.differencegroup.net/
