Donald Trump's special envoy Steve Witkoff has announced the launch of phase two of the plan to end the conflict in Gaza.
It includes disarming Hamas, rebuilding the war-ravaged territory and establishing a group of Palestinian experts to govern Gaza under American supervision.
The National Committee for the Administration of Gaza (NCAG), which is described as a transitional technocratic body, will be responsible for administering daily affairs in Gaza.
NCAG will be overseen by the "Board of Peace", an international panel led by Donald Trump.
Phase two is outlined under a ceasefire deal, brokered by the US, which was secured after two years of war between Israel and Hamas.
"The US expects Hamas to comply fully with its obligations, including the immediate return of the final deceased hostage. Failure to do so will bring serious consequences," Witkoff wrote in a post on X.
Sky's US correspondent Mark Stone says the part about disarming Hamas is "clearly a huge challenge", and there is no detail on that.
"They [Hamas] haven't disarmed. And [Israel] also wanted the remains of the last hostage to be found and brought back... that still hasn't happened.
"Notwithstanding both of those facts, the Americans have persuaded the Israelis to agree to move to phase two.
"The other significant point is that the Palestinians also appear happy with this move to phase two. And they are endorsing it."
The mediators of the ceasefire deal - Egypt, Turkey and Qatar - welcomed the establishment of the NCAG and said it would be led by Ali Shaath, a former deputy minister in the Palestinian Authority.
Israeli Prime Minister Benjamin Netanyahu said diplomat Nickolay Mladenov, a former Bulgarian defence and foreign minister who served as UN envoy to Iraq, has been selected as the Board of Peace's director-general.
Sky's Middle East correspondent, Adam Parsons, said that "as for the second phase, it's enormously complicated. And there are so many huge assumptions within it".
"Hamas has to disarm... that is going to be a herculean task. Israel has to withdraw from the Gaza Strip. I have to say they [Israel] are not going to do that as long as Hamas has failed to disarm. These are huge boulders in the path of progress."
"This peace plan does also call for a sort of safeguarding military peacekeeping force, but there are no indications about who could serve."
Read more from Sky News:
Analysis: Gaza longs for normality
Mother of Israeli hostage warns Hamas
The ceasefire reached under Donald Trump's 20-point plan took effect in October and stopped much of the fighting.
But the first phase of the deal has faced multiple challenges, including Hamas failing to find and return the remains of the last remaining Israeli hostage, Israeli airstrikes which have killed hundreds of people, a refusal by Hamas to disarm and Israeli delays in reopening Gaza's Rafah border crossing with Egypt.
Although the two sides accuse each other of breaching the deal, Donald Trump says he wants to move on to the second phase.
The United Nations has estimated reconstruction will cost more than $50bn (£37bn). The process is expected to take years, and little money has been pledged so far.
(c) Sky News 2026: US launches phase two of plan to end Gaza conflict, including creation of transitional authori
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