A day after worldwide condemnation of Trump's announcement that he aimed to take over and develop the Gaza Strip into the "Riviera of the Middle East", Israel ordered its army to prepare to allow the "voluntary departure" of Gaza Palestinians.
Trump, who had previously declined to rule out deploying US troops to the small coastal territory, clarified his idea in comments on his Truth Social web platform.
"The Gaza Strip would be turned over to the United States by Israel at the conclusion of fighting," he said. Palestinians "would have already been resettled in far safer and more beautiful communities, with new and modern homes, in the region."
He added: "No soldiers by the US would be needed!"
Earlier, amid a tide of support in Israel for what Prime Minister Benjamin Netanyahu called Trump's "remarkable" proposal, Defence Minister Israel Katz said he had ordered the army to prepare a plan to allow Gaza residents who wished to leave to exit the enclave voluntarily.
"I welcome President Trump's bold plan. Gaza residents should be allowed the freedom to leave and emigrate, as is the norm around the world," Katz said on X.
He said his plan would include exit options via land crossings, as well as special arrangements for departure by sea and air.
Trump's unexpected announcement on Tuesday, which sparked anger around the Middle East, came as Israel and Hamas were expected to begin talks in Doha on the second stage of a ceasefire deal for Gaza, intended to open the way for a full withdrawal of Israeli forces and an end to the war.
Regional heavyweight Saudi Arabia rebuffed the proposal outright and Jordan's King Abdullah, who will meet Trump at the White House next week, said on Wednesday he rejected any attempts to annex land and displace Palestinians.
Egypt also weighed in, saying it would not be part of any proposal to displace Palestinians from neighbouring Gaza, where residents reacted with fury to the suggestion.
"We will not sell our land for you, real estate developer. We are hungry, homeless, and desperate but we are not collaborators," said Abdel Ghani, a father of four living with his family in the ruins of their Gaza City home.
"If (Trump) wants to help, let him come and rebuild for us here."
It is unclear whether Trump will go ahead with his proposal or, in keeping with his self-image as a shrewd deal-maker, has simply laid out an extreme position as a bargaining ploy.
His first term in 2017-21 was replete with what critics said were over-the-top foreign policy pronouncements, many of which were never implemented.
What effect Trump's shock proposal may have on the ceasefire talks remains unclear. Only 13 of a group of 33 Israeli hostages due for release in the first phase have so far been returned, with three more due to come out on Saturday. Five Thai hostages have also been released.
Hamas official Basem Naim accused Israel's defence minister Katz of trying to cover up "for a state that has failed to achieve any of its objectives in the war on Gaza", and said Palestinians are too attached to their land to ever leave.
Displacement of Palestinians has been one of the most sensitive issues in the Middle East for decades. Forced or coerced displacement of a population under military occupation is a war crime, banned under the 1949 Geneva Conventions.
Israel's military campaign killed tens of thousands of people after Hamas' October 7, 2023 cross-border attack on Israel touched off the war, and has forced Palestinians to repeatedly move around within Gaza in search of safety.
But many say they will never leave the enclave because they fear permanent displacement, like the "Nakba", or catastrophe, when hundreds of thousands were dispossessed from homes in the war at the birth of the state of Israel in 1948.
