Donald Trump’s Board of Peace, which was set up in January to oversee the reconstruction of Gaza, has finally issued its first construction contract in the devastated territory: a project to build a rudimentary 150-person military outpost to house Moroccan troops, a source familiar with the matter told the Guardian.

The contract, which has not yet been finalised, was awarded to Arkel International, a Louisiana-based firm that has previously carried out work with the US government in countries such as Iraq.

The Board of Peace is chaired by the US president and led by a team that includes his son-in-law Jared Kushner and friend Steve Witkoff.

In an email, a Board of Peace official said the board and a group of Palestinian technocrats installed to oversee Gaza “are in the final stages of preparing several contract awards. None have been finalised.” The Palestinian group is known as the National Committee for the Administration of Gaza.

The official said “one prospective contract concerns facilities to support the international stabilisation force (ISF), which will assist in implementing the roadmap’s security and governance arrangements”.

They added: “This contract will be one of many that are essential for the future of Gaza.”

The award comes just days after Trump announced that Hamas had agreed to disarm, though there are considerable questions about how the group would give up its guns. Israel has opposed the plan, and increased airstrikes in Gaza after Trump’s announcement.

The Guardian reported in July that the board’s original Gaza reconstruction had shrunk dramatically from an ambitious blueprint to rebuild the whole territory to a small pilot project in the south of the strip.

The base now being planned is just 100 metres by 120 metres and is intended to house a contingent of Moroccan troops, who would rotate from a base in Israel, the source said. It would lie in the 60% of Gaza’s territory that the Israeli army directly controls. Israeli forces have also created a buffer zone beyond that area.

The source said the base was about a mile from the Israeli border and would have a “quick extraction route” in case the small force came under attack.

The UN resolution authorising the Board of Peace had approved establishing an “international stabilisation force” for Gaza, and there have been varying reports on which country would provide these troops. Morocco has promised a small contingent, but the legal framework for the ISF has yet to be finalised, and it is not clear when the deployment would begin.

In earlier contract plans seen by the Guardian, the 150-person base was the first phase of a plan to build a 5,000-person military base in Gaza for the ISF.

This base would have included “vehicle fighting positions” and a perimeter berm – or raised defensive bank – and would have rudimentary facilities suitable for short-term deployments. The earlier contract said the first phase would consist of “tents and cots for forces to sleep, as well as chemical toilets and handwashing stations. At this phase, this is what we would consider habitable.”

Trump announced in February 2025 that the US would “take over” and “own” Gaza, although the agreement that set up the Board of Peace fell short of that.

At the board’s first meeting in January, Kushner unveiled a “master plan” to build “New Gaza” with an expansive waterfront city with gleaming mixed-use towers. “It could be a hope, it could be a destination. A lot of industry,” he said.

At least 80% of Gaza’s buildings were damaged or destroyed in the war. Ten months after the ceasefire, most of the territory’s 2 million people are still living in makeshift and unsanitary camps.