The pilot project near Rafah will house tens of thousands of "vetted" Palestinians, an anonymous representative of Trump's council said, according to the news agency.
The zone will be guarded by international soldiers from a newly established so-called stabilization force, ISF, acting on behalf of the council.
According to AFP's source, unarmed civilians who have been screened will be able to move in and out as they please.
The plans raise concerns. Grouping civilians into guarded, controlled zones could amount to forced displacement, representatives of non-profit organizations and diplomats told the news agency.
The Israel Hayom newspaper has previously described the project as a “Hamas-free” zone.
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