In any final settlement between Israel and the Palestinians, compensation for the material and moral losses of the Palestinian refugees will be a central feature. The parties have ostensibly agreed that compensation will be paid, but differ significantly on the principles that will determine the global amount of compensation, the valuation of losses, and the method of distribution to the recipients. Compensation for refugees, for of human rights violations, and for property loss have become well-grounded features in contemporary international law. The author argues that these international law principles should shape the compensation agreement that will settle the conflict, because fairness and transitional justice, rather than unequal bargaining power, will more readily hasten the healing of the many wounds that the Palestinians and Israelis have endured.
Reaching a final, durable, and equitable resolution of the Middle East conflict requires the comprehensive settlement of the Palestinian refugee issue. (1) In its cornerstone pronouncement on the conflict, the United Nations Security Council in 1967 called for the just settlement of the refugee problem. (2) Israel and the Palestine Liberation Organization acknowledged, in their 1993 Declaration of Principles, that the refugee issue is one of the most intractable problems at the heart of their aspirations for peace, and postponed its resolution until the future initiation of final status negotiations. (3) Israel has agreed, in its 1994 peace treaty with Jordan, that the persistence of the refugee issue over the past five decades has caused massive human problems in the region, and the settlement of the issue is to be in accordance with international law. (4) Beyond this, there has been little substantive progress by the parties towards a final settlement of the fate of the Palestinian refugees, and little consensus between them as to the requirements of international law. At the centre of the issue is the national and individual status of the majority of the estimated 7.6 million Palestinians in the world today: the 3.9 million Palestinian refugees who were displaced, personally or by family lineage, from their homes, properties, and lands by the 1947-49 and 1967 Middle East wars. The irresolution of their fate perpetuates the largest, longest-running and most destabilizing refugee problem in the world today.
Contemporary legal, political, and diplomatic analyses of the Palestinian refugee issue have focused on three principal components: repatriation, resettlement, and compensation. In current settlement proposals, these three components are intimately interlinked, but they are each capable and deserving of stand-alone analysis. Repatriation focuses on the generally accepted right in international law of refugees to choose whether to return to their homeland and their homes following the cessation of conflict or persecution. (5) Palestinians claim their capacity to exercise this right of return extends to Israel as well as to a future state of Palestine, (6) while the most liberal position articulated by official and semi-official Israeli spokespersons have argued that any more than a very modest number of refugees returning to their ancestral homes within its borders would threaten its existential character as a Jewish state. (7) Resettlement is the strongly maintained Israeli solution, which would see all, or almost all, of the estimated 3.9 million registered Palestinians refugees required to accept permanent civil status of some form in their present homes in Syria, Lebanon, and Jordan, return to a truncated Palestinian state, or accept relocation elsewhere. (8) Palestinians resist this option, arguing that it would abolish their legal right to return and negate their decades of suffering in exile. (9)
The third issue, compensation, focuses on the individual and collective claims of the …