Residents survey the damage after returning to the southern Lebanese border village of Odaisseh after Israeli troops pulled out. AFP
Residents survey the damage after returning to the southern Lebanese border village of Odaisseh after Israeli troops pulled out. AFP
Residents survey the damage after returning to the southern Lebanese border village of Odaisseh after Israeli troops pulled out. AFP
Residents survey the damage after returning to the southern Lebanese border village of Odaisseh after Israeli troops pulled out. AFP

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MENA

'Trump economic zone’ between Lebanon and Israel: What we know

Concept raised in meetings between Lebanese and US officials in Beirut, source tells The National

The National

August 26, 2025

  • English
  • Arabic

US envoy Tom Barrack announced in Beirut on Tuesday a plan to establish an economic zone between Lebanon and Israel.

The proposal aims to transform the southern border from a conflict zone dominated by Hezbollah into a hub for trade and investment.

Here is what we know so far about the US plan:

What did Barrack say?

The US envoy said something needs to replace conflict in southern Lebanon.

“We have to have a substitute for what happened, because there is another outside party,” he said, referring to Iran.

“Iran has been the financier of the growth of Hezbollah, both its municipality and its militia. So how do we substitute that?” he asked.

“We bring in the Gulf countries simultaneously and a new economic zone, which will have some depth to it in the next few weeks.”

Who has discussed the plan?

The concept of a “Trump economic zone” was raised in meetings between Lebanese officials and the US delegation in Beirut, a source familiar with the talks told The National. “The topic came up, but there were no substantive discussions,” the source said.

Local media in Lebanon reported that the proposal was first floated during a meeting in Paris between Israeli Strategic Affairs Minister Ron Dermer and Mr Barrack.

What is the proposed zone?

According to media reports, the US envisions the zone in southern Lebanon near the Israeli border.

The idea is to create an industrial buffer that prevents Hezbollah from re-establishing a military presence close to Israel. In theory, according to Israeli experts, that could address Israel’s security concerns without involving a reoccupation.

Under the plan, the area would host state-run factories, separated from Israeli communities on the other side of the border. Reports in Lebanese media described it as an “industrial buffer zone” and suggested that recent Israeli military incursions along the frontier may be aimed at shaping such a corridor.

Who will invest in it?

According to Axios, Saudi Arabia and Qatar have signalled readiness to invest in the reconstruction of southern Lebanon once Israel withdraws. Neither country has commented publicly.

Both states, along with other potential donors, have also made clear that any funding for Lebanon’s postwar reconstruction would be contingent on the start of Hezbollah’s disarmament and Israel's withdrawal from Lebanon.

How realistic is it?

Hezbollah has been the dominant force in southern Lebanon for decades, building tunnels, shaping politics and recruiting fighters.

The group has been battered by recent Israeli strikes, leaving parts of the south devastated and exposing it to daily attacks.

“For now, this is similar to the Trump Gaza Riviera plan,” a security source told The National.

“It would need agreement with Hezbollah, with the state, and with the people of the area. This isn’t displacement like Gaza. It might actually work, but it will take time.”

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LebanonIsraelHezbollahIran