The Future Failed State That Israel Is Creating in Gaza

Key Findings:

Israel is undertaking efforts to reshape Gaza in the aftermath of its ongoing conflict with Hamas, but its current strategies are laying the groundwork for a future failed state rather than a stable post-Hamas order. 

One key initiative is the establishment of the Gaza Humanitarian Foundation (GHF), designed to replace the existing United Nations-led aid distribution system. The goal was to bypass Hamas, which has historically exploited international aid, by putting Israel in direct control of humanitarian delivery. However, in practice, the GHF has created more problems than it solved. With only four distribution points—compared to the previous 400—the system is overwhelmed, inaccessible for many, and dangerous. Aid recipients must travel long distances and wait in chaotic, militarized zones, where violence has broken out due to poor crowd control, exploitation by stronger individuals, and interference from criminal groups and Hamas fighters. Scores of Palestinians have been killed during these distributions. The system has failed to prevent Hamas from accessing aid, and it undermines basic humanitarian principles by shifting from a needs-based system to one that is coercive, inefficient, and alienating. The result is a population more distrustful of centralized authority, more reliant on informal networks, and more resentful of the actors involved in aid provision, particularly Israel.

Compounding this instability is Israel’s reported arming of the Abu Shabab clan, a powerful criminal group in Gaza known for smuggling and violence. The Israeli government views the group as a tactical ally against Hamas, despite its own criminal and extremist tendencies. This strategy recalls historical missteps, such as Israel’s tacit support for Hamas in the 1980s to counterbalance the PLO, or the United States’ support for the Afghan mujahideen, which later evolved into anti-Western militant networks. The danger is that the weapons and power handed to Abu Shabab now may be turned against Israel in the future. More immediately, the move contributes to the fragmentation of Gaza into rival factions and militias, none of which have the capacity or legitimacy to govern effectively. By weakening Hamas without supporting a credible replacement—such as a strengthened Palestinian Authority with functioning institutions—Israel is facilitating the rise of warlordism and lawlessness.

In the short term, these policies may undermine Hamas' control, but in the long term, they are entrenching conditions typical of failed states: a breakdown of institutional authority, the proliferation of armed non-state actors, and the collapse of basic services and civic trust. Even under Hamas, Gaza maintained a centralized—albeit repressive—form of governance. In contrast, the current trajectory risks creating a power vacuum where no group holds effective control, resulting in chronic violence, black-market economies, and humanitarian collapse. While Israel may prefer chaos to a strong Hamas, this binary framing ignores the broader regional consequences. A failed Gaza will not only perpetuate Palestinian suffering but also generate enduring security threats for Israel, making future policy choices more constrained and dangerous. In trying to solve one problem, Israel is creating another—one that could prove even harder to contain.