In the coordination meetings that took place between Israel and the Palestinians prior to the Disengagement, the future of the homes in the settlements was extensively discussed. Israel expressed its willingness to leave the homes intact, should the Palestinians so desire. However, the Palestinians themselves preferred that the homes, mostly spacious single family rural dwellings, be demolished, in order to allow for the construction of multi-family apartment buildings, which would be more appropriate for the local population. In addition, the Palestinian leadership felt that the new construction would provide an important source of employment for the area following the Disengagement.

Consequently, Israel has taken upon itself to demolish the structures, and dispose of any hazardous material within Israel in accordance with procedures established by the Ministry of Environment. The remaining used building material will be either recycled in the new construction of apartment buildings or hauled away by Palestinian contractors at Israel’s expense.

Further Sources:

A. Chief Palestinian negotiator Saeb Erekat, May 5, 2005 as reported by Xinhuanet:

Chief Palestinian negotiator Saeb Erekat called Thursday (May 5) on Israel to demolish Jewish settlers’ houses in settlements that Israel is expected to evacuate in August:

"I will tell the Israelis to demolish all of them and even take all the rubble with you, because this is our firm position – to demolish these houses because we do not want to live in them," Erekat told the Voice of Peace, a pro-peace radio jointly run by Israeli and Palestinian peace activists.

B. Housing and Public Works Minister Mohammad Shtayyeh, May 26, 2005 as reported by Reuters

The Palestinian Authority plans to demolish Jewish settler houses in Gaza and replace them with high-rise apartment blocks to ease crowding, a minister said today (May 26):

"If Israel does not destroy settlers’ homes, we will destroy them," Housing and Public Works Minister Mohammad Shtayyeh said.
Most Palestinian Cabinet members favored demolition, Mr. Shtayyeh said. The main reason was to make efficient use of scarce land in Gaza, one of the most densely populated territories on Earth, he said. Mr Shtayyeh said the settlement land could be used to build high-rise buildings to ease crowding.