The Trump administration is preparing a peace agreement modelled on Korea’s demilitarised zone (DMZ) in the hopes of skirting an impasse on the issue of territories between the Kremlin and Bankova, the Washington Post reported on December 10.

The mooted DMZ would be along the current line of contact with a ban on any heavy weaponry in the zone. The neutral ground does not come with any acknowledgement of sovereignty, The Washington Post reported, citing American, Ukrainian, and European officials familiar with the negotiations.

According to the report, the proposal comprises three main components: a ceasefire and peace deal, a package of security guarantees for Ukraine, and a postwar economic recovery programme. Sources quoted by the publication described the draft as “more realistic” than previous efforts.

Following a Moscow meeting on December 3 between the US envoys and Russian President Vladimir Putin, they produced a new 27-point peace plan (27PPP) with the issue of territories at the top of the list. Putin is demanding Bankova give up control of the Donbas and that the international community recognise Russia’s sovereignty over the region.

Following an E3 meeting in London on December 8 between Ukraine, UK, France and Germany, they produced a 20-point counter offer that includes a refusal to give up any territory, but includes a clear demand for real security guarantees from the US.

The US envoys Steve Witkoff and Trump’s son-in-law Jared Kushner have been shuttling between the two sides trying to find a compromise to reach an agreement.

A central provision of the plan is the creation of a wide demilitarised buffer zone running from the Donetsk People’s Republic (DPR) through the Zaporizhzhia and Kherson regions. The area beyond this buffer would be subject to a ban on heavy weaponry. Monitoring would be modelled after the demarcation line between North and South Korea, where military presence is tightly restricted, but sovereignty claims remain unresolved. There is no mention of who would monitor the DMZ. Putin has already ruled out any Nato members involvement, although Turkey has offered to mediate and might be an acceptable option for Putin.

The plan would dodge the territorial disputes as there is no formal recognition of land transfers. “The Trump team, according to the publication, believes Ukraine risks losing these areas in the coming months and should consider making concessions as part of a deal,” The Washington Post reported.

However, Ukrainian President Volodymyr Zelenskiy has rejected the notion of territorial concessions, stating he has no “legal grounds” to transfer any Ukrainian land to Russia. The Ukrainian constitution forbids giving up any territories to another power. However, Zelenskiy suggested holding a referendum last year to gain the authority to concede land if needed.

The DMZ boundary remains a hotly contested point of contention. Russia is reportedly demanding that Ukraine relinquish control of approximately 25% of Donetsk region territory it currently holds, including the “Fortress line” of heavy defences built by Kyiv. Zelenskiy has consistently refused to contemplate ceding any territory in the Donbas.

As part of the broader agreement, Washington is proposing Nato-style security guarantees, including a separate commitment package from European countries. The State Department has already drafted an Article 5-like security guarantee that includes a pledge to come to Ukraine’s military aid should Russia re-invade following a ceasefire. The report also says that the US will continue to provide Ukraine with crucial satellite intelligence even after a peace deal is reached, according to the draft.

The negotiations also include discussions on the use of more than $200bn in frozen Russian assets in Europe. Proposals to allocate at least $100bn from these funds to Ukraine as reparations were included as point 14 in the US-sponsored 28PPP version of the plan.

Simultaneously, the United States is in discussions with American investment company BlackRock over the creation of a Ukraine Development Fund worth up to $400bn.

The new draft outlines an accelerated path for Ukraine to join the European Union as soon as 2027. Ukraine’s EU accession bid is already underway and making progress, but EU officials have said that the process is unlikely to be completed until 2030 at the earliest. It appears that the Trump administration intends to pressure Brussels to cut the process short as part of the reconstruction plans.

The short timeline has raised concerns among some EU member states, particularly Hungary, but Trump's advisers believe the resistance can be overcome.

The Financial Times reported on December 9 that Trump aims for a peace deal to be concluded by Christmas, with Zelenskiy reportedly given several days to respond to the proposal.

Any push for hard concessions from Kyiv could cause the talks to collapse. If that happens, sources told The Washington Post, Ukraine would likely continue the conflict, potentially entering a more destructive phase.