Successive Israeli governments have strongly opposed the idea of the return of the Palestinians, considering it as an equivalent to ‘the suicide of the Jewish State’. Consequently, Israel has adopted a policy that categorically rejects repatriation and views resettlement in Arab countries as the only answer to the refugee problem. The Israeli government has frequently reiterated the stance taken after its creation in 1948, namely that ‘UN Resolution 194, like all other resolutions of the UN, is not binding and that there is no basis in international law for the right to return’.
In several peace negotiations Israel accepted, under many conditions, participation in a fund for the compensation of the Palestinian refugees, under the condition that the international community also participate in the fund. The fund should be intended solely for the resettlement and integration of Palestinian refugees in the neighbouring Arab countries – this resettlement being considered by Israel as ‘the only solution for their exile’.
Concerning the question of compensation, Israel has deposited, beginning with the Lausanne Conference in 1949, a whole range of counterclaims, for example the war damage endured by Israel in the attack by the Arab countries in 1948. The most important of all counterclaims concerns the loss of property and bank accounts of Jews in the Arab countries after they became citizens of the State of Israel. This issue concerns properties lost in the West Bank after the armistice of 1949 and in East Jerusalem after annexation by Jordan, as well as properties lost in Gaza after it came under Egyptian rule. The second kind of loss concerns counterclaims for those properties left behind by Jews in the various Arab countries when they migrated to Israel in or after 1948.
In 2010, the Israeli Parliament passed a bill that stipulates that the Israeli government must include Jewish refugee rights, notably compensation, in all future peace talks.