JERUSALEM—Israel and several Arab countries should work together to rebuild the Gaza Strip while disarming Hamas militants who rule the territory, Israel’s finance minister said Sunday.

The remarks by Yair Lapid come almost a week after Israel and Hamas militants reached a truce following two months of fighting that devastated parts of Gaza.

“We need a regional conference, with the Egyptians, the Saudis, the Gulf States,” Lapid, a member of the centrist Yesh Atid party, told reporters in Jerusalem. “That conference should focus on one thing, ensuring the rehabilitation takes place alongside demilitarization,” he said.

It is unclear how he foresaw the group demilitarizing Gaza as Hamas has vowed it will never give up its weapons.

Nor was it clear how responsive Arab countries, some of whom — Saudi Arabia for instance — have no formal ties with Israel, would be to such a conference. Lapid did not say if any countries had been consulted about the idea.

“This is a stupid demand, and no one among the Palestinian people would agree to such a thing” said Mushir al-Masri, a Hamas spokesman in Gaza. “Our weapons are used to defend our people, and this right was granted by heaven and human laws.”

Hamas and other Gaza militants fired 4,591 rockets and mortars at Israel during the fighting. Israel’s military says it struck 5,226 “targets” in Gaza. The two sides are set to hold indirect talks in Egypt next month on key disputes that remain unresolved.

Meanwhile Sunday, Israel announced the expropriation of about 1,000 acres of West Bank land in a step that could help clear the way for construction of a new Jewish settlement.

The Israeli military made the announcement Sunday in accordance with a government edict. It said the directive was made at the end of a military operation in June that searched for three Israeli teens who were abducted and killed by Hamas militants. The Hamas kidnapping and murder of the teens sparked a chain of events that led to the 50-day war.

The expropriated land is in Gush Etzion, an area near Jerusalem where the teens were abducted. Israel hopes to keep the area under any future peace deal with the Palestinians.

Nabil Abu Rdeneh, spokesman for Palestinian President Mahmoud Abbas, condemned the Israeli move and called for the decision to be revoked. He told the Palestinian news agency WAFA that it “leads to deterioration in the situation.”

The Israeli housing ministry said the announcement is just the first step and it will be several years before anything is built there.

The military said opponents have 45 days to appeal Sunday’s decision.

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Peace Now, an Israeli group that monitors settlements, said it is the biggest “land confiscation” since the 1980s.

Earlier Sunday, the Israeli military said a soldier wounded in fighting in the Gaza Strip had succumbed to his wounds, bringing the Israeli military’s death toll in the war to 66.

The military says 20-year-old Sergeant Shachar Shalev was wounded on July 23, six days after Israeli ground forces entered the densely populated coastal strip.

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