For over two years, the "Sinai Option"-the mass displacement of Gazans into Egyptian territory-has been the third rail of Middle Eastern diplomacy. Egyptian officials, from President Abdel Fattah El-Sisi down to the lowest border guard, have called it a "red line" that would trigger war. They have termed it the "liquidation of the Palestinian cause."
On December 25, 2025 , the Egyptian state finalized the publication of Presidential Decree No. 736 of 2025 in the Official Gazette (Issue No. 52 bis (c)). It is a bureaucratic document with explosive geopolitical implications. Under the innocuous guise of "national development," Cairo has officially allocated 6,227,658 square meters (approximately 1,482 acres) of state-owned land in North Sinai to the General Authority for Land and Dry Ports.
The stated purpose is the establishment of "logistics zones" to facilitate trade. But a closer look at the map reveals that Egypt is not building trade hubs; it is building the infrastructure for a population it can no longer keep out.
The Logistics of Deception
The decree targets three specific, strategically situated locations: Rafah, El Hassana, and the Baghdad area in North Sinai. The choice of these sites is not economic; it is tactical.
Rafah serves as the intake valve-the immediate spillover zone for the millions of Palestinian Arabs currently pressed against the border fence. However, it is the other two locations-El Hassana and Baghdad-that betray the regime's true intent. Located deep in the heart of Central Sinai, far from the populated Nile Delta and the sensitive Suez Canal, these areas serve as a secondary layer of defense.
By establishing massive "logistics zones" here, the Egyptian military is creating a defense-in-depth strategy for refugee management. The plan appears to be to process refugees at the border and then rapidly transport them to these isolated, high-security zones, effectively quarantining the Gazan population in the desert before they can mingle with the Egyptian populace or link up with domestic opposition in Cairo.
Crucially, Article 2 of the decree stipulates that the Armed Forces will retain ownership and control of any military-designated land that falls within the boundaries of these newly allocated plots. This confirms that despite the civilian cover of the General Authority for Land and Dry Ports, these zones will remain under strict military jurisdiction. This is martial law disguised as urban planning.
The Collapse of the "Red Line"
Why now? The timing of Decree 736 is inextricably linked to the intense pressure cooker dynamics of the last 48 hours. Reports indicate that the Netanyahu government, emboldened by the incoming Trump administration, is preparing to unilaterally facilitate the exit of Gazans.
For months, Egypt's Foreign Minister Badr Abdelatty has insisted that displacement is a "red line."1 But the economic reality has forced a pragmatic, if cynical, shift. With the Egyptian pound under immense pressure and international debt payments looming, the regime likely views the "Sinai Option" not as a choice, but as a survival mechanism.
Security Nightmare in the Making
The Camp David Accords were premised on a demilitarized Sinai and a clear separation between the Egyptian state and the Palestinian Arab struggle. Decree 736 erodes that separation.
If these "logistics zones" become the de facto new homes for hundreds of thousands of Gazans, North Sinai will transform into a permanent launchpad for asymmetric warfare. Hamas cadres, melting into the refugee population, will find themselves in a region already scarred by a decade of insurgency against the Egyptian state. The "Baghdad" zone in Central Sinai could easily become a new center of gravity for militant activity, located within striking distance of the Israeli border but shielded by Egyptian sovereignty.
Furthermore, the rhetoric coming from Israel’s coalition partners, who have long advocated for "voluntary migration," will now be validated. They will view the Egyptian construction crews in El Hassana not as logistics workers, but as the contractors of a new regional reality.
The Day After Is Today
With Presidential Decree 736, the spillover has effectively been formalized. Egypt is pouring concrete for the "Day After," and it looks nothing like the two-state solution diplomats dream of in Geneva. It looks like a securitized archipelago of tent cities and "dry ports" in the Sinai desert, managed by the Egyptian military and funded by a world desperate to look away.
The walls are coming down. The question is no longer if the Palestinian Arabs will move to Sinai, but how long the "logistics" cover story can hold before the tents go up.
Amine Ayoub, a fellow at the Middle East Forum, is a policy analyst and writer based in Morocco. Follow him on X: @amineayoubx