Trump’s 'Mar-a-Lago Directive' Slashes Odds of West Bank Annexation

FLORIDA — The probability of Israel formally declaring sovereignty over the West Bank before 2027 has faced a severe setback following a direct intervention by President Donald Trump. During high-stakes meetings at Mar-a-Lago on Monday, December 29, the President and his senior envoys explicitly directed Prime Minister Benjamin Netanyahu to "change policy" in the occupied territories, signaling that the White House views annexation as a "poison pill" for its primary regional objective: Saudi-Israeli normalization.

The Directive According to reports originating from Axios, the message was delivered not just by the President, but alongside key envoys Steve Witkoff and Jared Kushner. The directive creates an immediate friction point for the Netanyahu government. While the coalition has successfully advanced "de facto" annexation—evidenced by the December 21 security cabinet approval of 19 new settlements—the Trump administration is drawing a hard line against the transition to "de jure" sovereignty.

For market observers, this distinction is critical. The betting market resolves to "Yes" only upon an official legal act of sovereignty (similar to the 1980 Jerusalem Law). The administrative expansion of settlements, while significant on the ground, does not trigger a market resolution. Trump’s pressure is specifically aimed at preventing the Knesset from crossing that legal threshold.

The Normalization Lever The urgency of the American intervention stems from a clear ultimatum delivered by Arab mediators. Sources indicate that during meetings in Miami last week, Saudi and Qatari officials informed the U.S. that a regional "mega-deal"—and the revival of the stalled "Phase 2" Gaza truce—is dead on arrival without a settlement freeze.

This confirms the administration’s trajectory since October 2025, when President Trump publicly warned that formal annexation would cost Israel U.S. support. By prioritizing the Saudi deal, the White House has effectively capped the ceiling of Netanyahu's West Bank ambitions at the administrative level, blocking the legislative path required for formal annexation.

The Coalition Dilemma This leaves Netanyahu in a precarious bind. His far-right partners, Finance Minister Bezalel Smotrich and National Security Minister Itamar Ben-Gvir, view the current government as the vehicle for sovereignty. However, defying Trump risks the collapse of the government’s external security architecture. With the U.S. defining West Bank policy as a red line for regional integration, the window for a unilateral annexation declaration before the 2027 deadline is rapidly closing.