During the visit, Trump, alongside top advisers, made the case that a three-to-five-year timeline for reconstruction of the war-torn territory, was not a viable option.
“The Gaza thing has never worked,” Mr Trump told reporters from the Oval Office.
“If we could find the right piece of land, pieces of land, and build them some really nice places, I think that would be a lot better than going back to Gaza.”
During a press conference late on Tuesday following his meeting with Netanyahu, the US president went on to describe how Gaza had been a “very unlucky place for a long time”.
He added that together, the US and Israeli would return “peace” and “prosperity” to the region going forward and proposed a US-owned land where Palestinians could live “peacefully.
Speaking following Trump’s comments, Netanyahu addressed the US president, adding: “You are the greatest friend Israel has ever had in the White House”.
He added that “Israel will end the war by winning the war,” explaining that it will be a victory for the US as well.
Mr Trump also renewed his call to Arab nations to relocate displaced Palestinians as he welcomed Israeli Prime Minister Benjamin Netanyahu to the White House, saying “you can’t live in Gaza right now, you need another location”.
It comes as Trump signed an executive order on Tuesday withdrawing the US from the UN Human Rights Council.
Moments later, as he spoke to waiting media, he added that he had given his advisers instructions to ‘obliterate’ Iran should the nation attempt to assassinate him.
Egypt and Jordan, as well as other Arab nations, have flatly rejected calls by Mr Trump to relocate the territory’s 2.3 million Palestinians during post-war rebuilding of the territory.
But senior administration officials continue to press the case for relocation of Palestinians on humanitarian grounds.
“To me, it is unfair to explain to Palestinians that they might be back in five years,” Mr Trump’s Middle East envoy, Steve Witkoff, told reporters.
He went on to describe the time frame for those displaced as “just preposterous.”
The White House’s focus on reconstruction comes as the nascent truce between Israel and Hamas hangs in the balance.
The Israeli prime minister is facing competing pressure from his right-wing coalition to end a temporary truce against Hamas militants in Gaza and from war-weary Israelis who want the remaining hostages home and for the 15-month conflict to end.
Mr Trump, meanwhile, remains guarded about the long-term prospects for the truce, even as he takes credit for pressuring Hamas and Israel into the hostage and ceasefire agreement that came into effect the day before he returned to office last month.
“I have no guarantees that the peace is going to hold,” Mr Trump told reporters on Monday.
The leaders’ talks are expected to touch on a long-sought Israel-Saudi Arabia normalisation deal and concerns about Iran’s nuclear programme, but hammering out the second phase of the hostage deal will be at the top of the agenda.
Earlier in the day, Trump was seen to label UN funding by the US “excessive” as he sought to step away from both the international organisation and international aid commitments.
“The US funding to the UN is excessive and unfair,” the US President said while signing the order.
The executive order means Mr Trump has reinstated policies that were in place during his first administration.
Speaking to reporters, Trump said he was “torn” when choosing whether to sign it, but said Tehran was “too close” to having a nuclear weapon.
“Hopefully, we are not going to have to use it very much,” he said. “I’m unhappy to do it.”
Moments later, he announced his aids had been briefed on orders to “obliterate” Iran should plots to assassinate him be uncovered.
