  We analyze the structure of the vacuum and supersymmetry breaking pattern in
Fayet-Iliopoulos models with dynamical gauge coupling and planck-scale value of
the F-I parameter. We show that in this class of models supersymmetry is
generically broken, but the mere presence of the D-term is not sufficient to
stop the running away of the modulus responsible for the value of the gauge
coupling - the dilaton. To stabilize the dilaton, one has to include an
additional dilaton-dependent part in the superpotential. The presence of the
large D-term gives rise to the mixed dilaton/D-term dominated scenarios of susy
breaking, which allow horizontal hierarchy generation. Models which can serve
as secluded sectors in gauge mediation scenarios are discussed. It is shown
that when the F-I parameter and the gauge coupling are dynamical variables, the
D-term dominated Universe does not allow for an inflationary period.
