Israel wants open-ended control over security and civilian affairs in the Gaza Strip, according to a long-awaited post-war plan drawn up by Benjamin Netanyahu.
The Israeli prime minister presented the two-page document to his security cabinet late on Thursday for approval.
But it was swiftly rejected by Palestinian leaders and flies in the face of Washington’s vision for the besieged enclave.
Divisions over Gaza’s future have led to heightened public tensions between Israel and the United States, its closest ally.
The Biden administration is seeking eventual Palestinian governance in Gaza and the Israeli-occupied West Bank as a precursor to statehood and a two-state solution – an outcome strongly opposed by Mr Netanyahu and his right-wing government.
Mr Netanyahu’s plan envisions hand-picked Palestinians in Gaza administering the territory.
Meanwhile, ceasefire efforts appeared to gain traction, with mediators to present a new proposal at an expected high-level meeting this weekend in Paris.
The US, Egypt and Qatar have been struggling for weeks to strike an agreement that could halt Israel’s devastating offensive in Gaza, triggered by the deadly Hamas massacre on 7 October that left some 1,200 people dead and saw 250 others taken hostage.
The military operation has now killed more than 29,500 Palestinians, with close to 70,000 people wounded, Gaza health officials said.
Mr Netanyahu’s plan, while lacking specifics, is the first time he has presented a formal post-war vision.
It reiterated Israel’s determination to crush Hamas, the militant group that overran the Gaza Strip in 2007.
Polls have indicated a majority of Palestinians do not support Hamas, but it has deep roots in Palestinian society.
Critics, including some in Israel, say the goal of eliminating the group is unachievable.
Mr Netanyahu’s plan calls for freedom of action for Israel’s military across a demilitarised Gaza after the war to tackle any security threat.
It would also establish a buffer zone inside Gaza, which is likely to provoke US objections.
The plan sees Gaza being governed by local officials who it says would “not be identified with countries or entities that support terrorism and will not receive payment from them”.
It is not clear if any Palestinians would agree to such roles.
Over the past decades, Israel has repeatedly tried and failed to set up hand-picked local Palestinian governing bodies.
The Palestinian Authority, which administers pockets of the Israeli-occupied West Bank, has denounced Mr Netanyahu’s plan as “colonialist and racist”, saying it would amount to Israeli reoccupation of Gaza.
Israel withdrew its soldiers and settlers from Gaza in 2005, but maintained control of access to the territory.
The White House wants to see a reformed Palestinian Authority govern both Gaza and the West Bank as a step towards Palestinian statehood.
The US has sought to chip away at Mr Netanyahu’s resistance by holding out the prospect of the normalisation of ties between Israel and Arab powerhouse Saudi Arabia.