Skip to content
Jerusalem Center for Public Affairs
Strategic Alliances for a Secure, Connected, and Prosperous Region

How to Help Palestinian Refugees Today

Filed under: Palestinians
Publication: Jerusalem Viewpoints

No. 491    February 2003

  • Creating a mechanism that would ease the situation of Palestinian refugees in a way that promotes an eventual resolution of the conflict could contribute more toward long-term peace and stability than the current donor strategy. 
  • Correcting the discourse on refugees remains a major challenge for Palestinian and Arab political society – which for too long has valued martyrdom over negotiation, and statelessness over state-building.
  • There are examples of refugee resettlement programs that preceded, rather than followed, political settlements.

“For decades (Palestinians) have been treated as pawns in the Middle East conflict. Your interests have been held hostage to a comprehensive peace agreement that never seems to come, as your lives get worse year by year.”
– President George W. Bush, June 24, 2002

The collapse of the Oslo process and ever worsening Israeli-Palestinian violence demonstrate that certain long-held “truths” about the conflict need to be turned on their heads – none more so than the accepted wisdom that the Palestinian refugee problem, long a source of regional instability and a breeding ground for suicide terrorists, can only be addressed as part of a final settlement. Rather than follow a comprehensive agreement, ameliorating the Palestinian refugee problem increasingly looks like a necessary precondition for a permanent Israeli-Palestinian settlement. It might even be required for a meaningful resumption of negotiations.

Although the U.S. and the international community have had the logic backward for years, President George W. Bush now has an opportunity to step forward and lead an international effort that could begin to address the single issue that has most perpetuated the blood-letting between Israelis and Palestinians. Although such an effort will require more leadership and attention than Bush has shown so far, not to mention a change in the way America uses foreign aid in the Middle East, it would serve broad American national security objectives. With the U.S. desperate to prove its commitment to the Palestinians and the Arab world, Bush has an opportunity to demonstrate that improving the plight of Palestinian refugees need not be hostage to the current political deadlock – or to a comprehensive peace deal that has never seemed so far out of reach.

The Use and Misuse of Foreign Aid

Since the signing of the Oslo accord in 1993, the international community has poured upward of five billion dollars into the Palestinian territories – making Palestinians the highest per-capita recipients of development aid. The U.S. has disbursed $80-$120 million annually to the Palestinians since 1994, in addition to an annual $75 million allocation to the United Nations Relief and Works Agency (UNRWA) to support refugee programs. The Oslo aid effort was originally meant to deliver a peace dividend to Palestinians in order to build increased public support for continued negotiations. It was also aimed to help Palestinians establish the institutions of self-governance – which would form the foundation of a future Palestinian state. As the Oslo process faltered, aid increasingly went to emergency programs. Rather than a shot in the arm, it became a band-aid. Moreover, Oslo aid was never directed at the refugee question, since this was a subject the parties planned to tackle during final status talks. Therefore, throughout the process, the refugee problem continued to fester.

Tragically, much of the billions of dollars in Oslo assistance have literally gone up in smoke in recent months. Whether Israelis or Palestinians, or both, are to blame for the current meltdown, donor countries led by the U.S. and Europe would be wise not to repeat the mistakes of the past decade and ignore the plight of Palestinian refugees. Creating a mechanism that would ease the situation of Palestinian refugees in a way that promotes an eventual resolution of the conflict could contribute more toward long-term peace and stability than the current donor strategy of increasing emergency aid and bolstering Yasser Arafat’s shattered Palestinian Authority.

For Bush, such an initiative would help the U.S. regain credibility in the region without necessarily having to deal directly with the current Palestinian leadership. It would also be consistent with the goals Bush laid out in his June 24 Mideast speech, as well as the administration’s declared intention to increase spending on foreign aid.1 (A refugee initiative would also be ideal post-Iraq, when America’s focus is likely to turn back to Arab-Israeli matters.)

It is high time the donor community focuses as much on how to use financial aid to resolve the Israeli-Palestinian conflict as it does on emergency humanitarian assistance and continued budgetary support for a weak and corruption-plagued Palestinian Authority. Working to resolve the Palestinian refugee problem would be a good place to start. Therefore, the U.S. should launch an international initiative that would:

  1. support rehabilitation and resettlement in the West Bank and Gaza;
  2. provide economic support for refugees in neighboring states, including host governments, and;
  3. provide incentive packages for patriation to non-neighboring states, including in the West.

Rather than wait for Israelis and Palestinians to agree on a final settlement, which could take another generation, outside actors can offer inducements that would have the net effect of creating positive conditions on the ground that contribute to an eventual resolution of the conflict. Why allow the grievances of Palestinian refugees, from whose ranks so many suicide bombers are recruited, to deepen? Here is how such an incentive-based initiative for Palestinian refugees might work.

An Incentive-Based Initiative

At Camp David, President Clinton offered to underwrite a peace deal with $35 billion in aid, of which $10 billion would go toward compensating Palestinian refugees from the 1948 war.2 The American negotiators knew this figure was a starting point since it was understood that a larger package would be needed. They expected the amount would increase if a deal were reached. Unfortunately, Clinton failed to broker an accord, Ehud Barak failed to stay in power, and Yasser Arafat was guilty of committing the gravest failure – he failed to say “yes.” Still, the collapse of the political track does not mean donor countries should sit on their hands.

President Bush would be smart to revive and increase Clinton’s refugee offer, but de-link it from an immediate end of conflict.3 Although an end of conflict would not be the prerequisite, the U.S. can demand that Palestinian leaders outline specific goals for a permanent settlement, and receive assurances that Palestinians will not seek to exercise a “right of return” to Israel. The U.S. could frame such an initiative as part of a cease-fire and stabilization plan, and possibly as part of a post-Iraq peace initiative. Over the long-term, a U.S.-sponsored refugee initiative would also help create political space for future concessions by both sides. By opening up the debate, such an initiative could serve as a bridge to a permanent peace.

Experts say $50-100 billion is needed, but only half that sum would be required to launch a credible initiative that precedes a final settlement. What kind of mechanism would be needed to get the job done? In a recent report, the International Crisis Group (ICG) proposed the establishment of an International Commission on Palestinian Refugees (ICPR) to gather and disburse resettlement and compensation benefits.4 Although ICG is calling for such a commission as part of an Israeli-Palestinian peace accord, the sequencing can be reversed. Why wait for a peace deal that may be many years away?

The commission’s membership should be drawn from the current group of donors (U.S., E.U., Norway, Japan, Canada, and Arab states). The first priority for such an initiative should be refugee resettlement and rehabilitation. This entails, first and foremost, dealing with the U.N.-administered camps, especially in Lebanon where conditions are most dire, and in the territories, where there are nearly one and half million internally displaced.

Palestinian Refugees: Where Are They?
Distribution of Palestinian Refugees, as of June 2000

  Jordan West Bank Gaza Lebanon Syria Total

UN Registered
1,570,192 583,009 824,622 376,472 383,199 3,737,494
    % 42 16 22 10 10 100
280,191 157,676 451,186 210,715 111,712 1,211,480
    % 23 13 37 18 9 100

Source: United Nations Relief and Works Agency (UNRWA)


Compensation, which would only be addressed in a second phase, should be awarded on a standard per capita basis – a more equitable and a much less complicated scheme than one based on individual claims. There could still be provisions to supplement the per capita system at a later date with allowances for claims by refugees who incurred large losses. These provisions must be balanced against an overall “check” to ensure that initial funds do not go to refugees who have managed to land on their feet. “Need” must be a guiding principle.

Critical to the effectiveness of this inducement approach would be putting a fixed-term on the enterprise, after which both the commission and UNRWA, the principal international agency providing humanitarian aid, would be dismantled. Though a common refrain of naysayers is that refugees “can’t be bought,” the proposition that inducements could have a positive impact has never been tested, even though it has worked elsewhere. In fact, there is no reliable Palestinian public opinion data on the refugee question. Once a vigorous debate opens, and Palestinians are presented with accurate information and real choices, the results may surprise all concerned. Too much of the past debate has been mired in mythologies and tired rhetoric.5

Telling the Truth

Any initiative that seeks to change the benefit calculus of refugees also requires an honest public discourse about future prospects. It is time to admit a little secret about recent “policy talk” surrounding the refugee issue. While many possible “destinations” for refugees have been proposed, most are more fanciful than feasible. According to various proposals, including President Clinton’s, Palestinian refugees could:

  1. go to Israel (a small number, possibly based on family reunification),
  2. resettle in Israeli land swapped to a future Palestinian state (in return for annexing settlement blocs),
  3. return and/or re-settle in a future Palestinian state in the West Bank and Gaza,
  4. settle and integrate in current host countries,
  5. patriate to non-neighboring states, including the West

As for refugees moving to Israel, in light of the collapse of the Oslo process and the brutal violence that ensued, no Israeli government will ever allow Palestinians to “return.” For Israelis, the current war is leading to ever greater worry about demography, not geography. If there was a time when Israel was willing to entertain the notion of a token return of 25, 50, or 100,000 refugees, that time has passed – if not for a generation, then forever. In Israel, a country of fractious politics and deep social divisions, there is no issue today for which there is greater unanimity.6

Of all the final status questions, including Jerusalem, settlements, and borders, only the refugee issue poses an existential threat to the Jewish state. Ironically, ideas for shared sovereignty in Jerusalem, long an Israeli sacred cow, are still discussed in Israel because such arrangements could effectively remove 200-250,000 Palestinians. (They would remain Jerusalemites, but ostensibly become citizens of Palestine.) Arguments from Palestinians, like Salman Abu Sitta, that a return of refugees would not upset Israel’s demographic balance, do not hold much water, particularly under present conditions.7

As for the second option, if territory is ever swapped in a final settlement it will not amount to much in terms of absorptive capacity. This is especially true if the swapped land is in inhospitable places like the Halutza sand dunes near Gaza, or the southern Hebron area. Other ideas to swap Israeli Arab lands adjoining the West Bank are more a challenge to Israeli democracy and social cohesion than a solution to long-term Jewish demographic concerns. Although unlikely, it is still conceivable that swapped land could provide a destination for some refugees. However, this option will only come with a final settlement.

As for a future Palestinian state in the West Bank and Gaza, which the Bush Administration has endorsed repeatedly, there is room and potential resources to absorb some external Palestinian refugees – in theory. However, in practice, the absorptive capacity will be very low for some time. Conditions at present largely foreclose such an option for years to come. Palestine is a long way from being able to support Hong Kong or Singapore-style high-density development. With an exploding population and a ruined economy, it will be a long road to recovery for a future Palestinian state.

Palestinians everywhere must have a right to return and live in a future Palestinian state – and that state will likely adopt measures similar to Israel’s “Law of Return.” But practical realities are undeniable. Few refugees will decide to return, whether to a provisional or final Palestinian state. Therefore, when it comes to the territories, a U.S.-sponsored international initiative should focus on resuscitating refugees presently in the camps.

Of the nearly four million UN-registered Palestinian refugees in the Middle East, only a fraction would be able to return to a future Palestinian state in the foreseeable future.8 However, a future Palestinian state, even in its provisional phase, could offer citizenship to Palestinians anywhere. Such an arrangement could be a powerful antidote to predictable political hurdles that will confront a refugee settlement. This has already been proposed by a constitutional committee headed by Nabil Shaath.9

The main avenues available to Palestinian refugees outside the territories will be options four and five, as well as eventual compensation. For a long time there was scarcely a prominent Palestinian willing to admit this in public. The good news is that in recent months a number of leading figures, like Abu Mazen, Sari Nusseibeh, Ziyad Abu Ziyad, and Yasser Abed Rabbo, have begun to speak out and dispel long-standing mantras about “return” to Haifa, Jaffa, and Ashkelon. Prominent Palestinians are now beginning to distinguish between the principle of a “right of return” and its implementation. Nusseibeh, Abu Ziyad, and Abed Rabbo, among others, have been explicit in recognizing that the basis for settling the refugee problem must be the two-state paradigm.

Sadly, Arafat has done nothing to support this debate or to respond to extremists voices in Fatah, like the Kataeb al Awdah (Brigades of the Return). In fact, Arafat has undermined these other Palestinian leaders, most publicly Nusseibeh, but also Abu Mazen and Abed Rabbo.10 Correcting the discourse on refugees remains a major challenge for Palestinian, and Arab, political society – which for too long has valued martyrdom over negotiation, and statelessness over state-building.

Altering the Refugees’ Risk-Reward Calculus

Critics will dismiss a refugee initiative that precedes an end of conflict as putting the cart before the horse. How can the Palestinian refugee issue be addressed when territorial and security issues remain unresolved? The more ideological obstructionists will insist Israel admit singular guilt, accept total responsibility, and offer compensation before refugees accept any kind of buy-out. Old guard Palestinian leaders, like Arafat, will fear that such a plan undercuts their already weak bargaining position, not to mention the empowerment it would give to the most disenfranchised Palestinians. Other nationalists, especially those living comfortably outside the territories, repeat the common refrain that no matter how much money is offered – refugees will refuse. Both pride and politics will be raised to scuttle any inducement-based refugee initiative.11

While no amount of money can entice every refugee to surrender dreams of “return,” or eliminate Palestinian grievances, which have been so damaging to Palestinian national aspirations in recent years, a generous incentive package can positively alter the risk-reward calculus for countless refugee families. Just as important, a credible international effort could also help change the Palestinian political discourse in positive ways. Furthermore, there are a host of examples of refugee resettlement and other resolutions that preceded, rather than followed, final political settlements. Bosnia provides the example of return before state-building. Afghanistan and Cambodia in the 1990s demonstrate the possibility of return before end of conflict. After World War II, Germany offered resettlement in lieu of repatriation. Pakistan and India resettled large refugee communities after partition.

The initiative outlined here is largely built around improving the status quo on the ground rather than catalyzing large population movements across borders, something that should appeal to leaders in the region interested in stability.

Undoubtedly, such a bold plan to alleviate the refugee problem will face other obstacles. Some Arab leaders will blanch at an internationally-funded refugee resettlement and compensation scheme that precedes a final settlement, since they prefer to keep the refugee issue a symbol of Palestinian victimhood – which, conveniently, can also deflect internal criticism. In Lebanon, the issue has always been explosive since it challenges the country’s fragile demographic balance.

One way to reduce regional misgivings is to offer generous incentives to host governments themselves. Arab countries, like Jordan, that are willing to join such a new initiative should be given additional development aid up front and granted preferential treatment by international financial institutions like the World Bank. Obstructionists, possibly Syria and Lebanon, that refuse to endorse the resettlement and compensation fund should be denied such incentives and shut out of the potentially lucrative programs. Should states in the region cooperate, new aid would serve as another source of influence in the continuing war on terrorism.

Understandably, Palestinians, not to mention Jordanians, might worry that such an initiative would give the U.S. and other third parties an excuse to disengage from day-to-day mediation – and let the conflict slide toward greater chaos. But a new initiative on refugees does not displace the immediate responsibility of the U.S. and the international community to help end the violence, promote Palestinian reform, restore a political dialogue, and oppose unilateral Israeli measures, like continued settlement expansion, that further complicate the situation. One effort does not supplant the other.12 In fact, with Palestinian capacity for self-government at an all-time low and talk of a new trusteeship or international mandate (e.g. Kosovo or East Timor) increasingly common, a refugee initiative may become all the more imperative.

Palestinians may also worry about the international community’s ability to follow through on such a scheme. There is ample evidence from other refugee and post-conflict settlements that a gap can quickly grow between pledges and disbursements. Palestinians themselves experienced this during the Oslo process, and Afghans are dealing with similar concerns today.13 Therefore, new formulas and guarantees would be needed to reassure Palestinians and get the program off to a quick start. One possibility is to stipulate that the commission be fully endowed before funds are disbursed, but such a lofty goal may be unattainable. At a minimum, donor countries could partner with private insurance carriers to guarantee follow-on contributions, perhaps issuing “refugee peace bonds.” New and creative thinking is needed.

New Logic to Transcend a Failed Past (and a Stalled Present)

Refugee camps, whether in the territories or neighboring countries, have long served as an open wound and breeding ground for extremists. In a sense, the international community has been complicit since, for a half century, no serious alternative was offered. In fact, the opposite occurred: the international community has paid the bills to keep refugees in camps. Of the many regions suffering refugee dislocations since World War II, from Central Europe to South Asia, only with the Palestinians has the international community consented to perpetuating a refugee predicament for so long.

The current situation, particularly the delivery of international assistance through UNRWA, is untenable and does nothing to contribute to an eventual settlement. UNRWA today spends almost $400 million a year and employs tens of thousands of local Palestinians in an arrangement that maintains Palestinian dependency, generation after generation. UNRWA has done much good from one day to the next, but it stands in the way of a Palestinian future.14

For too long the international community has allowed the 50-year-old refugee regime, which values camps over resettlement, to remain in place, believing that resolving the refugee dilemma must wait for a permanent peace. This logic must be turned on its head. The international community should turn its attention to positive steps that can be taken even in the absence of a permanent agreement. This should be the order of the day since the prospect of an end of conflict, much less the resumption of meaningful talks, remains highly unlikely in the near-term.

When it comes to the refugee question, the real tragedy is that the debate is often more about emotion than substance. As Jerome Segal has argued, the differences are mainly over “conceptualizations, not outcomes.”15 Should Palestinian refugees be given a choice in their own destiny, their decisions might just surprise all parties concerned – particularly the naysayers and obstructionists who oppose new thinking and innovative initiatives that could have a positive impact on this tragic problem.

The Bush Administration, which is so fixated on preemptive military action, should consider the merits of other pre-emptive and pro-active policies that serve vital American interests. A U.S.-led, incentive-based refugee resettlement and compensation package could go a long way toward rebuilding Palestinian support for peace – not to mention helping the U.S. manage its vast array of other interests across the Middle East. At a minimum, it would do no worse than the current situation where 50 years of political impasse and international welfare have failed to help Palestinians achieve their rightful national aspirations, leaving the refugees paying the highest price.

*     *     *


1. Although the president’s new five billion dollar Millennium Challenge Account (MCA) is unlikely to yield new funding for the Middle East, new financing will soon be available through the administration’s Middle East Partnership Initiative (MEPI) and other additional aid appropriations the White House has pushed through in the aftermath of September 11.
2. Although there were reports that promises of refugee aid at Camp David were much higher, the $10 billion figure appears most reliable. It comes from Bruce Reidel, Clinton’s top NSC Mideast staffer. See Bruce Riedel, “Camp David – The U.S.-Israeli Bargain.” July 15, 2002, at
3. In its recently released national security blueprint, the Bush Administration has already promised more aid if Palestinians successfully “embrace democracy and the rule of law.” See “National Security Strategy” cited in New York Times, September 20, 2002.
4. See ICG report, published July 16, 2002, accessed at
5. One of the most enduring (and obscuring) facets of the debate is the claim that UNGA resolution 194 enshrines a “right of return.” See Ruth Lapidoth, Jerusalem Viewpoints 485. While Palestinian refugees do have legitimate claims, neither international law nor relevant UN mandates afford a collective or individual “right” to return to Israel.
6. “If the choice is between concession and war,” wrote veteran centrist commentator Zeev Schiff in early 2001 about the “right of return,” “it’s better to risk a violent confrontation.” For quotes by Schiff and a report on the statement by Amos Oz, David Grossman, A.B. Yehoshua and other prominent Israeli leftists against the “right of return,” see “The New Consensus,” Jerusalem Post, January 12, 2001.
7. See Salman Abu-Sitta, Palestinian Right to Return: Sacred, Legal, and Possible (London: Palestinian Return Centre, 1999).
8. As the Economist wrote recently, “To add (Palestinian refugees) to the almost 10 million people already jammed into Israel and the Occupied territories, a space the size of Sicily, sounds a calamitous proposition.” Economist, April 13, 2002.
9. According to a draft Palestinian constitution; 1. all Palestinian refugees would be entitled to citizenship, but not necessarily voting rights; 2. a “right of return” would be guaranteed to the state of Palestine; 3. a role for refugees would be reserved in setting “national policy; and 4. a second chamber of the Palestinian parliament would represent refugees. See
10. For Abu Mazen, see quotes in Akiva Eldar’s September 5, 2002 column in Ha’aretz; see also Abu Mazen speech to Fatah “popular” councils in Gaza, lengthy excerpts appear in MEMRI 449, December 15, 2002, cited from an original account in Al-Hayat, November 26, 2002. (See also “Special Report no. 5: Palestinian Thought on the Right of Return,” MEMRI, March 30, 2001.) For Nusseibeh comments, see Ayalon-Nusseibeh plan, cited in Ha’aretz, September 5, 2002; “Rage and Reason” by David Remnick, New Yorker, May 6, 2002; and Nusseibeh 2001 speech at Hebrew University as cited in “Palestinian Offers Idea: Get Israelis on Our Side,” New York Times, October 17, 2001.
For Abu Ziyad, who is a member of the Palestinian Legislative Council, see “Ziyad Abu Ziyad’s Statement of Principles,” Ha’aretz, July 23, 2002. For Abed Rabbo statement (and denunciation by the London-based Palestinian Return Centre), see “A Guessing Game, News Shorts,” The Palestine Report, November 27, 2002, and “PA Minister Willing to Forgo Right of Return,” Jerusalem Post, November 27, 2002. For Arafat citation, see Khaled Abu Toameh, “Fatah: Suicide Attacks are Acts of Self-Defense,” Jerusalem Post, January 8, 2003; and “Bickering from the Beginning,” Jerusalem Post, January 3, 2003.
11. Practical exchanges between Israelis and Palestinians on the refugee issue are increasingly hard to come by. Although it preceded the collapse of the negotiations, one important and enduring exchange occurred under the auspices of Harvard University. See Khalil Shikaki and Yossi Alpher, “The Palestinian Refugee Problem and the Right of Return,” Weatherhead Center for International Affairs, Harvard University, May 1998.
12. A refugee initiative of this kind, coupled with more assertive U.S. and international diplomatic efforts, may also help to alleviate the growing fear among the Jordanian establishment that Ariel Sharon’s true intention is to foster conditions that lead to a new Palestinian exodus across the Jordan River.
13. See Shepard Forman and Stewart Patrick, Good Intentions (Boulder: Lynn Rienner, 2001).
14. UNRWA has long resisted the argument about the negative long-term impact of continuing it’s delivery of welfare and basic services. (Although following Israel’s Operation Defense Shield in early 2002, deep concern emerged within UNWRA as to whether the agency was becoming a proxy for the occupation.) As argued in this paper, the international refugee regime, with UNRWA at its core, represents a cycle of dependency that can be broken, even under present circumstances.
UNRWA’s own description of its role is telling, “UNRWA is unique in terms of its long-standing commitment to one group of refugees and its contributions to the welfare and human development of four generations of Palestine refugees. Originally envisaged as a temporary organization, the Agency has gradually adjusted its programmes (sic) to meet the changing needs of the refugees. Today, UNRWA is the main provider of basic services – education, health, relief and social services – to over 3.9 million registered Palestine refugees in the Middle East.” Cited at
15. Jerome Segal, “Clearing Up the Right-of-Return Confusion,” Middle East Policy, June 2001.