Donald Trump's special envoy Steve Witkoff has announced the launch of phase two of the plan to end the conflict in Gaza.
The next phase involves disarming Hamas, rebuilding the war-ravaged territory and establishing a group of Palestinian experts to govern Gaza under American supervision.
That panel, called the National Committee for the Administration of Gaza (NCAG), will be responsible for administering daily affairs in Gaza.
Phase two is outlined under a ceasefire deal, brokered by the US, which was secured after two years of war between Israel and Hamas.
"The US expects Hamas to comply fully with its obligations, including the immediate return of the final deceased hostage. Failure to do so will bring serious consequences," Witkoff wrote in a post on X.
Sky's US correspondent Mark Stone says the part about disarming Hamas is "clearly a huge challenge", and there is no detail on that.
"They [Hamas] haven't disarmed. And [Israel] also wanted the remains of the last hostage to be found and brought back... that still hasn't happened.
"Notwithstanding both of those facts, the Americans have persuaded the Israelis to agree to move to phase two.
"The other significant point is that the Palestinians also appear happy with this move to phase two. And they are endorsing it."
Mr Witkoff did not offer any details about who would serve on the new transitional Palestinian administration that would govern Gaza.
Stone said he has an idea who could be in the running, and it is unlikely to be former UK prime minister Tony Blair, partly because of his legacy with the Iraq war.
"The name to watch is Nickolay Mladenov, who is the former Bulgarian foreign minister and former defence minister, who held a key UN job in Gaza, over the past few years... he's a man respected by both sides," Stone added.
Read more from Sky News:
Analysis: Gaza longs for normality
Mother of Israeli hostage warns Hamas
The ceasefire reached under Donald Trump's 20-point plan took effect in October and stopped much of the fighting.
But the first phase of the deal has faced multiple challenges, including Hamas failing to find and return the remains of the last remaining Israeli hostage, Israeli airstrikes which have killed hundreds of people, a refusal by Hamas to disarm and Israeli delays in reopening Gaza's Rafah border crossing with Egypt.
Although the two sides accuse each other of breaching the deal, Donald Trump says he wants to move on to the second phase, which would establish the Board of Peace and peacekeeping forces.
The United Nations has estimated reconstruction will cost more than $50bn (£37bn). The process is expected to take years, and little money has been pledged so far.
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(c) Sky News 2026: US moves to transitional government in Gaza

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