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The larger peace proposal has been stymied by the Palestinian Authority, which would negotiate any settlement but remains incensed at Trump's decision last year to recognize Jerusalem as the capital of Israel. A group of U.S. officials led by Jared Kushner came away from what had appeared to be a crucial trip to the region last month without breaking the impasse.
That has led U.S. officials to consider options for an infusion of development aid into Gaza, a perennial trouble spot that is controlled by Palestinian Authority rival Hamas, in hopes of relieving the humanitarian crisis there.
In doing so, the United States could demonstrate a commitment to the Palestinians that could make it more difficult for Palestinian Authority President Mahmoud Abbas to continue to rebuff overtures to engage in the peace process.
"We definitely have a Gaza focus right now because the situation is the way it is, and we want to try to help," said a senior Trump administration official. "But it's not as though we think we need to fix Gaza first before we would air the peace plan."
One possibility would be projects to improve Gaza's electrical and water services in the short term, most likely funded by Persian Gulf states and other potential donors and coordinated with U.N. Middle East envoy Nikolay Mladenov.
Israeli officials said they welcome a "Gaza first" approach as a way to both put pressure on Hamas and wait out the rival Palestinian leadership in the West Bank. Israel, Egypt and the Palestinian Authority maintain an embargo on Hamas-led Gaza.
"It's providing support to people in Gaza as a first stage," one senior Israeli official said. "They know the Palestinians are not willing to consider [the larger proposal] so they are starting to put more attention on the humanitarian situation in Gaza."
U.S., Israeli and Arab officials requested anonymity to discuss the U.S. diplomatic initiative, because the plan led by Kushner, the president's son-in-law and adviser, remains under wraps.
Unemployment in Gaza is above 40 percent, and residents have only about four hours of electricity per day. The United Nations says conditions there are dire and growing worse, and predicts that without intervention, the seaside territory bordering Israel and Egypt will be "unlivable" by 2020.
Protests on the Gaza-Israel border in April and May led to the deaths of scores of Palestinians, and the Trump administration has backed Israel against international criticism that its soldiers used disproportionate force by shooting civilians rushing the border fences during the protests.
The United States accuses Hamas, which it labels a terrorist organization, of using Gazans as pawns in a power struggle with the Palestinian Authority's Abbas. Abbas' allies accuse the United States of using the Gaza crisis for leverage to force him to bargain from what he considers a weakened position.
Abbas said last month that he rejected a U.S.-organized economic package for Gaza as an attempt by the Trump administration to divide Palestinians and reduce a political conflict with Israel to a purely humanitarian emergency. A statement from his spokesman warned regional countries against backing a project that would further separate Gaza from the West Bank and require concessions on the status of Jerusalem.
A Gaza-focused approach could have at least short-term political benefits for Israel, if a truce on the hostile border replaced images of deadly clashes.
"We do want to support them," the senior Israeli official said of the U.S. team, adding that it remains unclear whether Hamas would agree to the truce and a prisoner exchange that Israel would demand at the outset of any proposal.
Other diplomats who have worked on failed peace efforts wondered how the administration would square a push to improve life in Gaza with its decision last year to cut U.S. funding for the U.N. agency that provides schooling and other services in the territory of 2 million.
The Trump administration roughly halved the amount of aid it had been expected to deliver to the agency on Jan. 1 in protest of Palestinian reaction to Trump's Jerusalem announcement and other U.S. policies.
While the administration turns its focus to Gaza, veterans of the Middle East peace process are generally skeptical about Trump's chances to drive a broader peace agreement - what he has called "the ultimate deal."
Trump made the difficult task all but impossible by recognizing Jerusalem as the Israeli capital in December and rupturing trust with the Palestinians, said Philip Gordon, a former career diplomat who was an adviser on the Middle East to President Barack Obama.
"There's never going to be a right time to put forward a plan that has no chance of succeeding, and that's how I would describe it under the current leadership on both sides," Gordon said, referring to the Israelis and Palestinians.
The visit by U.S. officials led by Kushner to Egypt, Jordan, Saudi Arabia, Qatar and Israel last month appeared to delay rather than hasten a release of the plan.
Arab states including close U.S. allies denounced the Jerusalem decision, saying it appeared to prejudge the explosive issue of sovereignty over a city holy to Jews, Christians and Muslims. The U.S. move, which Trump had promised as a candidate, also left Arab leaders less room to help Trump with his campaign promise to seek a peace deal.
Three senior Arab diplomats interviewed after the Kushner trip in June said their countries did not budge on long-standing Palestinian demands for a state inside the borders of Arab Palestinian lands as they existed in 1967 and a capital of that state in East Jerusalem. Palestinians also seek redress for Arabs who left homes in what is now Israel when the state of Israel was established.
"All the Arab leaders remain very supportive of the Palestinian cause and their wants and needs, but they still remain committed to help us see if we can reach a peace deal," the senior Trump administration official said.
The U.S. official dismissed suggestions that the focus on Gaza is a prelude to a U.S.-driven plan to create a Palestinian state in Gaza, cutting the recalcitrant Palestinian Authority out of the deal.
"That's ludicrous," the official said. "We are not trying to do this. We think that the solution under a peace agreement would be a united Gaza and West Bank, under one Palestinian leadership."
In an unusual interview last month with the Arabic-language Palestinian newspaper al-Quds, Kushner expressed optimism that investment and calm could transform Gaza.
"I think the only path for the people of Gaza is to encourage the leadership to aim for a true cease-fire that gives Israel and Egypt the confidence to start allowing more commerce and goods to flow to Gaza," Kushner said. "Many countries would be willing to invest in Gaza if there was a true prospect for a different path."
The interview was part of U.S. efforts to communicate directly with Palestinians in the West Bank and Gaza in hopes of putting political pressure on the Palestinian Authority and Hamas.
The Kushner team cannot deal directly with the Hamas government in Gaza but would rely on international partners as primary funders and go-betweens for development projects to provide energy, water and health-care facilities. All such infrastructure and underwriting runs the risk of enriching and emboldening Hamas.
Previous peace efforts under Republican and Democratic presidents have sought a sovereign Palestinian state in the West Bank and Gaza, which lie on opposite sides of Israel. The West Bank remains occupied territory - Israel withdrew from Gaza in 2005.
The border crisis that escalated over the summer has ebbed, but Gazans still launch burning kites that the Israelis call "terror kites" over the fences to sabotage Israeli farm fields. Arab governments worry that the crisis could easily flare up anew and potentially lead to the fourth major military confrontation between Israel and Hamas forces in Gaza since Hamas took control of the strip more than a decade ago.
Kushner said last month that the peace proposal is coming soon and will form a basis for negotiations. He appealed directly to Palestinians to consider the benefits of a settlement with Israel despite their leaders' view that the United States cannot be an honest broker in the peace process.
"There is really no deadline," the Trump administration official said. "We're here for, what, another two and a half years? Or six and a half years. So, on our side, we have the luxury of time and can be patient. The plan isn't going to change."