Gaza’s $71 Billion Reconstruction Crisis Shows Why Ending the Fighting Is Only the Beginning of Recovery
By Sadaf Sundas Riaz | SCN NEWS
ISLAMABAD, Aug. 26, 2026 — More than 10 months after a ceasefire was supposed to open a path out of Gaza's war, millions of Palestinians remain trapped between emergency survival and a reconstruction effort whose estimated cost has climbed to $71.4 billion, with damaged homes, crippled hospitals, shattered schools and failing basic services making clear that an end to large-scale fighting is not the same as a return to normal life. The United Nations told the Security Council on Wednesday that Israeli strikes were continuing, humanitarian and security problems persisted and around two-thirds of Gaza remained inaccessible or subject to severe access restrictions, leaving civilians concentrated in overcrowded and insecure areas. With winter approaching, stocks of shelter and other essential items depleted and the 2026 humanitarian appeal only 40% funded, the UN warned that Palestinians should not be forced to spend another winter in cold tents.
The scale of what must eventually be rebuilt is now clearer than it was when the ceasefire began. A final Rapid Damage and Needs Assessment prepared by the United Nations, European Union and World Bank estimates Gaza will require about $71.4 billion over the next decade, including $26.3 billion during the first 18 months to restore essential services, rebuild critical infrastructure and restart economic activity. The assessment estimates $35.2 billion in physical damage and another $22.7 billion in economic and social losses, with housing alone accounting for $18 billion in direct damage. More than 371,000 housing units have been damaged or destroyed, more than half of hospitals are non-functional and nearly every school has been damaged or destroyed, while Gaza's economy has contracted by 84%.
Those numbers turn Gaza's post-war challenge into something much larger than a construction programme. Rebuilding a house means little to a family if clean water, electricity, healthcare, schools and livelihoods around it do not function, while reopening a hospital cannot restore a health system if medical supplies, power and specialized personnel remain unavailable. UN Acting Special Coordinator Ramiz Alakbarov told the Council that electricity must be restored, including through the Gaza Power Plant, because power is essential to water, sanitation and other services, while sewage and waste-management systems also require urgent rehabilitation. Massive quantities of untreated sewage are flowing into the Mediterranean, he said, illustrating how destruction of civilian infrastructure continues to create health and environmental risks even when active combat decreases.
Healthcare provides one of the clearest examples of the distance between a ceasefire and recovery. The reconstruction assessment found that more than half of Gaza's hospitals were non-functional, while health accounted for about $6.8 billion in estimated economic and social losses. Humanitarian organizations were still providing hundreds of thousands of medical consultations each week by June, with infectious diseases, respiratory illnesses, skin conditions and acute watery diarrhoea adding pressure to a system already constrained by shortages of medical supplies, fuel, generator oil and spare parts. The UN said on Wednesday that more Palestinians must be allowed to travel for specialized treatment in the West Bank, including East Jerusalem, and abroad while medical capacity inside Gaza is rebuilt.
Education faces an equally difficult recovery. Nearly all schools have been destroyed or damaged, according to the final damage assessment, creating a challenge that cannot be solved simply by reconstructing buildings because years of disrupted schooling have also affected children's learning, mental wellbeing and future prospects. Even where education has resumed in alternative forms, basic infrastructure remains an obstacle: during Gaza's June secondary examinations, around 6,000 registered students were unable to participate on the first day, with limited access to devices, unreliable internet and insufficient electricity among the problems reported by humanitarian partners. Funding was another constraint, with less than 10% of the education component of the humanitarian appeal funded by late June.
Housing may nevertheless become the most visible measure of whether recovery is reaching ordinary families. More than 371,000 housing units have been damaged or destroyed, and shelter stocks remain depleted as another winter approaches. Reconstruction on that scale requires more than international pledges: rubble and explosive hazards must be cleared, construction material must enter Gaza in sufficient quantities, land and property questions must be addressed and water, electricity and sanitation networks must be restored alongside homes. Until those systems begin functioning together, families can technically remain beyond the emergency phase while still living under conditions that bear little resemblance to recovery.
Women and children will carry a disproportionate part of that transition. Women-led organizations in Gaza have told the UN that people living inside the territory must have a direct role in designing recovery rather than receiving plans written entirely elsewhere, and Alakbarov stressed Wednesday that women and girls should be central to reconstruction efforts. That principle has practical consequences: rebuilding decisions determine where families live, whether mothers can reach health services, whether children can safely attend school and whether women have access to employment and community services. A reconstruction programme measured only in kilometres of roads, tonnes of concrete or billions of dollars could therefore succeed on paper while failing the people whose lives it is supposed to restore.
The humanitarian situation also demonstrates why reconstruction cannot simply wait for perfect political conditions. Around two-thirds of Gaza remained inaccessible or severely restricted as of Wednesday's briefing, while humanitarian organizations continued to face constraints involving supplies, access and funding. Israeli airstrikes resumed on Aug. 12 following a week-long lull, and shelling, drone attacks and ground operations had not stopped, according to the UN briefing. More than 100 Palestinians were killed and over 400 injured during the reporting period, Alakbarov said, citing Gaza's Ministry of Health, figures that underscore how civilians remain exposed even as diplomats describe the period as a ceasefire.
Israel has said it is facilitating humanitarian assistance and has argued that Hamas and other armed groups remain a central obstacle to stabilizing Gaza. At an earlier Security Council debate, Israel's representative said major crossings were open and accused Hamas of exploiting civilians and resisting disarmament, while Palestinian officials blamed Israeli restrictions for delays in shelter, aid and restoration of basic services. Those competing accounts form part of the political dispute surrounding recovery, but the physical condition documented by the UN, EU and World Bank leaves little disagreement about the magnitude of the civilian reconstruction requirement.
Recovery also cannot be separated indefinitely from livelihoods. Gaza's economy has contracted by an estimated 84%, meaning reconstruction must eventually move people away from dependence on humanitarian assistance toward employment and functioning local markets. Restoring commerce, agriculture, transport and basic financial activity will therefore be as important as rebuilding physical infrastructure, particularly because a population dependent almost entirely on outside assistance remains vulnerable to every funding shortage or access restriction. The final damage assessment estimates commerce and industry suffered $6.35 billion in direct physical damage, second only to housing, demonstrating how extensively the destruction has affected people's ability to support themselves.
That transition is made harder by the enormous gap between what is required immediately and what international donors have so far financed. The $71.4 billion estimate covers roughly a decade, but $26.3 billion is expected to be required within just the first 18 months for essential services, critical infrastructure and economic recovery. At the same time, the UN said Wednesday that its 2026 humanitarian flash appeal was only 40% funded, leaving agencies struggling to meet current needs before the much larger reconstruction programme has fully begun. Gaza therefore faces two financial emergencies at once: keeping people alive and protected today while assembling enough money to rebuild the systems they will need tomorrow.
The UN also argues that money and construction alone cannot deliver sustainable recovery. Alakbarov told the Security Council that Gaza's reconstruction and the broader political process were mutually dependent, saying neither could be sustained in isolation and calling for Gaza and the West Bank eventually to be reunified under a single legitimate Palestinian government as part of a two-state political framework. The implication for civilians is immediate: homes, schools and hospitals could be reconstructed, but another collapse into war could destroy those investments and again displace the families who return to them. Recovery therefore depends not only on how quickly donors finance reconstruction but on whether political arrangements can create enough stability for rebuilt communities to remain standing.
The scale of the setback makes time another form of humanitarian cost. The United Nations said in April that Gaza's human development had been pushed back by an estimated 77 years, a measure capturing damage not merely to buildings but to education, health, income and the wider conditions that determine people's opportunities. Every additional year in which children learn intermittently, patients depend on emergency medical systems and families remain in temporary shelter compounds losses that cannot be repaired as quickly as concrete infrastructure. A school can eventually be rebuilt; the years of education a child loses while waiting for it are harder to restore.
Gaza's next humanitarian test will therefore not be whether international donors can announce enough money to reach a $71.4 billion reconstruction target. It will be whether families can leave tents for permanent homes, children can return to functioning schools, hospitals can treat patients without emergency improvisation, clean water and electricity can become reliable again and people can earn livelihoods instead of surviving indefinitely on aid. More than 10 months into the ceasefire, the UN's latest warning makes the gap unmistakable: for Gaza's civilians, stopping a war and recovering from one are two very different milestones — and the second may take a generation.