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The question of Palestinian refugees :

The number of Palestinians who fled Israel following its creation and their descendants now stands at around four million.

Left-wing Israelis are open to compromise on the issue, by means such as the monetary reparations and family reunification initiatives offered by Ehud Barak at the Camp David 2000 summit. However, the majority of Israelis find a comprehensive right of return for Palestinian refugees to be unacceptable. The HonestReporting organization listed the following grounds for this opposition:
-Palestinian flight from Israel was not compelled, but voluntary. After seven Arab nations declared war on Israel in 1948, many Arab leaders encouraged Palestinians to flee, in order to make it easier to rout the Jewish state. This point, however, is a matter of some contention. Certain actions on the part of Jewish militias were considered to provoke Palestinians to leave Israel. Eye witness accounts from Ain al-Zeitoum and Er-Rama, for example, record that the Palmach assembled all of their residents following the villages' surrender. The Jewish militia then demanded that all Muslim residents depart for Lebanon, and leave their possessions behind, under pain of death. Still, such cases were relatively rare, and the vast majority of Palestinians fled of their own accord. Since most Palestinians chose their status as refugees themselves, some argue that Israel is therefore absolved of responsibility. In fact, a 1952 memorandum submitted to the League of Arab States by the Higher Arab Committee reveals that Arab states officially agreed to take responsibility for these refugees at the height of the Palestinian exodus, until such time as Israel would be destroyed:
Arab leaders and their ministries in Arab capitals ... declared that they welcomed the immigration of Palestinian Arabs into the Arab countries until they saved Palestine.
-There is no legal basis to demand repatriation of Palestinian refugees and their descendents. No international legislation, UN resolutions or agreements between Israel and the Palestinians require this.[58]
-Historical legal precedent from the Middle East supports this contention. Since none of the 900,000 Jewish refugees who fled anti-Semitic violence in the Arab world were ever compensated or repatriated by their former countries of residence—to no objection on the part of Arab leaders—a precedent has been set whereby it is the responsibility of the nation which accepts the refugees to assimilate them.
-An influx of Palestinian refugees would lead to the destruction of the state of Israel. Because a right of return would make Arabs the majority within Israel, this would essentially seal the fate of the Jewish state. As Fatah explains: “To us, the refugees issue is the winning card which means the end of the Israeli state.”
Palestinian and international authors have justified the right of return of the Palestinian refugees on several grounds:
-Several authors included in the broader New Historians assert that the Palestinian refugees were chased out or expelled by the actions of the Haganah, Lehi and Irgun. A report from the military intelligence SHAI of the Haganah entitled "The emigration of Palestinian Arabs in the period 1/12/1947-1/6/1948", dated 30 June 1948 affirms that:
"At least 55% of the total of the exodus was caused by our (Haganah/IDF) operations." To this figure, the report's compilers add the operations of the Irgun and Lehi, which "directly (caused) some 15%... of the emigration". A further 2% was attributed to explicit expulsion orders issued by Israeli troops, and 1% to their psychological warfare. This leads to a figure of 73% for departures caused directly by the Israelis. In addition, the report attributes 22% of the departures to "fears" and "a crisis of confidence" affecting the Palestinian population. As for Arab calls for flight, these were reckoned to be significant in only 5% of cases...
-The traditional Israeli point of view arguing that Arab leaders encouraged Palestinian Arabs to flee has also been disputed by the New Historians, which instead have shown evidence indicating Arab leaders' will for the Palestinian Arab population to stay put.
-The Israeli Law of Return that grants citizenship to any Jew from anywhere in the world is viewed by some as discrimination towards non-Jews and especially to Palestinians that cannot apply for such citizenship nor return to the territory from which they were displaced or left.
-The strongest legal basis on the issue is UN Resolution 194, adopted in 1948. It states that, "the refugees wishing to return to their homes and live at peace with their neighbours should be permitted to do so at the earliest practicable date, and that compensation should be paid for the property of those choosing not to return and for loss of or damage to property which, under principles of international law or in equity, should be made good by the Governments or authorities responsible." UN Resolution 3236 "reaffirms also the inalienable right of the Palestinians to return to their homes and property from which they have been displaced and uprooted, and calls for their return". Resolution 242 from the UN affirms the necessity for "achieving a just settlement of the refugee problem," however, Resolution 242 does not specify that the "just settlement" must or should be in the form of a literal Palestinian right of return.

Mutual recognition :

The Oslo peace process was based upon Israel ceding authority to the Palestinians to run their own political and economic affairs. In return, it was agreed that Palestinians would promote peaceful co-existence, renounce violence and promote recognition of Israel among their own people. Despite Yasser Arafat's official renouncement of terrorism and recognition of Israel, some Palestinian groups continue to practice and advocate violence against civilians and do not recognize Israel as a legitimate political entity.Simultaneously, at the time of Hamas's victory in the 2006, polls indicated that 66% of Palestinians supported mutual recognition and a two-state solution to the Palestinian-Israeli Conflict.

It is widely felt among Israelis that Palestinians did not in fact promote acceptance of Israel's right to exist. Palestinians respond that their ability to spread acceptance of Israel was greatly hampered by Israeli restrictions on Palestinian political freedoms, economic freedoms, civil liberties, and quality of life. Many feel that their own opposition to Israel was justified by Israel's apparent stifling of any genuine Palestinian political and economic development.

Israel cites past concessions, such as Israel's disengagement from the Gaza Strip in August, 2005, which did not lead to a reduction of attacks and rocket fire against Israel, as an example of the Palestinian people not accepting Israel as a state. Palestinian groups and Israeli Human Rights organizations (namely B'tzellem) have pointed out that while the military occupation in Gaza was ended, the Israeli government still retained control of Gaza's airspace, territorial water, and borders, legally making it still under Israeli control. Practically, they also point out that mainly thanks to these restrictions, the Palestinian quality of life in the Gaza Strip has not improved since the Israeli withdrawal. Furthermore, given that the Israeli army has run incursions into the Gaza Strip on various occasions, closed off its borders, and placed an embargo on the region, the Gazan economy has since gone into free fall. This has led and continues to result in warnings of the Palestinian population becoming more radicalized unless conditions improve.

Many significant Palestinian militant groups refuse to recognize Israel's existence, based on their belief that Israel has repeatedly taken Palestinian resources and violated their perceived rights. Based on this, they seek to destroy Israel at some point in the future. It is unclear how much popular support they have. In response, some Israeli groups and individuals oppose any territorial or political concessions to Palestinians.

Period 2003-today :

Prime Minister of Israel Ariel Sharon announced a controversial disengagement plan in December 2003. Israel was to remove all of its civilian and military presence in the Gaza Strip, (namely 21 Jewish settlements there, and four in the West Bank), but continue to supervise and guard the external envelope on land excepting a border crossing with Egypt, which is jointly run by the Palestinian National Authority in conjunction with the European Union. Israel also maintained exclusive control in the air space of Gaza. The Israeli government argued that "as a result, there will be no basis for the claim that the Gaza Strip is occupied territory," while others argued that the only effect would be that Israel "would be permitted to complete the wall (that is, the Israeli West Bank Barrier) and to maintain the situation in the West Bank as is."

Israel implemented their disengagement plan in August-September 2005, and it was initially popular with most Israelis, helping Prime Minister Ehud Olmert to win the following election after Sharon was incapacitated by a stroke. As preparation for Israel's withdrawal from the Gaza Strip, Fatah and Hamas had called a cease-fire on attacks against Israel in February 2005. CNN reported in 2006 that Fatah and Hamas "stuck to the cease-fire it announced in February 2005, but other groups did not sign on and have continued attacks against Israel." Nevertheless, Israel continued to target militants inside Gaza whom it alleged had planned or carried out attacks on Israel, including some members of Hamas. Then in June 2006, violence on both sides escalated. Israel killed a Hamas official in a missile attack on June 5; then on June 6 militants from the "Popular Resistance" group fired rockets into Israel which produced no casualties; Israel launched airstrikes against those militants and others, killing five; and then an Israeli navy gunboat fired shells onto a northern Gaza beach, killing seven and wounding 20 amongst the Palestinian families picnicking on the beach. In response, Hamas called off its 16-month-old cease-fire.

Since that time, Israeli military incursions into Gaza and Palestinian rocket attacks towards Israeli cities have continued to this day. Later in June 2006, Corporal Gilad Shalit, a 19-year-old Israeli IDF soldier, was captured by members of Hamas. Israel carried out a military operation against targets in Gaza, which it claimed to be in response to Palestinian attacks. Israeli Prime Minister Olmert stated that Israel's goal was not to reacquire control of the Gaza Strip, and that the IDF would withdraw once its operations were completed.

Hamas's victory in the 2006 elections for Palestinian Legislative Council, and Ismail Haniyeh's ascension to the post of Prime Minister further complicated the peace process. Hamas openly states that it does not recognize Israel's right to exist, although they have expressed openness to a long-term hudna or truce.

In early 2007, Hamas and Fatah met in Saudi Arabia, and reached agreement to form a new unity government. Haniyeh later resigned, and a new unity coalition government of both Fatah and Hamas took office in March 2007. In 2007, the coalition of Hamas and Fatah collapsed, and the two engaged in a physical struggle. Eventually, Fatah was defeated in Gaza, and Hamas took over full control of the Gaza Strip. Fatah retains control of the West Bank. Gaza has been subjected to economic sanctions due to Hamas' non-recognition of Israel, and sporadic fighting between Israel and Hamas in Gaza has continued. Hamas has made recent attempts to renew a cease-fire with Israel, but Israel has so far rejected their offer.

Major issues between the two sides :

Since the Oslo Accords, finalized in 1993, the government of Israel and the Palestinian National Authority (PNA) have been officially committed to an eventual two-state solution. However, there are many major issues which remained unresolved between the two parties.

Oslo peace process (1993-2000) :

In 1993, Israeli and Palestinian leaders from the Palestine Liberation Organization strove to find a peaceful solution to the Israeli-Palestinian conflict known as the Oslo peace process. Perhaps the most important milestone of this period was Yasser Arafat's letter of recognition of Israel's right to exist. The crux of the Oslo agreement was that Israel would gradually cede control of the Palestinian territories over to the Palestinians in exchange for peace. The Oslo process was delicate and progressed in fits and starts, but finally came to a close when Arafat and Barak failed to reach agreement. Robert Malley, special assistant to President Clinton for Arab-Israeli Affairs, has confirmed that Barak made no formal written offer to Arafat. Consequently, there are different accounts of the proposals considered. However, the main obstacle to agreement appears to have been the status of Jerusalem.

Peace Initiatives (2002) :

One peace proposal, presented by the Quartet of the European Union, Russia, the United Nations and the United States on September 17, 2002, was the Road map for peace. This plan did not attempt to resolve difficult questions such as the fate of Jerusalem or Israeli settlements, but left that to be negotiated in later phases of the process. Israel did not accept the proposal as written, but called out 14 "reservations" or changes before they would accept it, which were unacceptable to the current Palestinian government. The proposal never made it beyond the first phase, which called for a halt to Israeli settlement construction and a halt to Israeli and Palestinian violence, none of which was achieved. Prime Minister Ariel Sharon stated around this period that further unilateral withdrawals from some West Bank settlements might be undertaken if the peace process seemed to be stalled.

Arab Peace Initiative :

The Arab Peace Initiative (Arabic: مبادرة السلام العربية) is a peace initiative first proposed by Abdullah of Saudi Arabia, then crown prince, in the Beirut Summit. The peace initiative is a proposed solution to the Arab-Israeli conflict as a whole, and the Israeli-Palestinian conflict in particular.

The initiative was initially published on 28 March 2002 in Beirut Summit, and agreed on again in 2007 in the Riyadh Summit. The peace initiative achieved the unanimous consent of all members of the Arab League, including both the Hamas and Fatah Palestinian factions.

Considered a progressive proposal that would end the Arab-Israeli conflict, unlike the Road map for peace it spelled out "final-solution" borders based explicitely on the UN borders established before the 1967 Six-Day War. It offered full normalization of relations with Israel, in exchange for the withdrawal of its forces from all the Occupied Territories, including the Golan Heights, to recognize "an independent Palestinian state with East Jerusalem as its capital" in the West Bank and Gaza Strip, as well as a "just solution" for the Palestinian refugees.

Although initially rejected by Israel, the Arab Leage continues to raise it as a possible solution, and meetings between the Arab League and Israel have been scheduled.

Period 1945-1948 :

After World War II, continuous Zionist pressure to relocate Jewish survivors of the Holocaust in Palestine caused difficulties for the British authorities before the international community, since they still rigorously applied the policies against further Jewish immigration outlined in the 1939 White Paper. The United Nations proposed a two-state solution, with a Jerusalem/Bethlehem enclave internationalized and adopted a Partition Plan on 29 November 1947. The Plan was accepted by Yishuv but rejected by the Arab League representing the Arab states. A civil war broke out immediately in Palestine as British troops began evacuating the country.

Violence intensified. In February, Arab volunteers entered Palestine. The Jewish sector of Jerusalem became isolated. In April, the Haganah took the offensive and defeated Arab Palestinians and volunteers, and took control of different mixed localities. A massive exodus of Palestinian Arabs began.

Israel declared its independence on May 14, 1948. Several Arab armies entered Palestine. After six weeks of heavy fighting, particularly around Jerusalem, all parties agreed to a truce. This was used by Israel to reinforce her forces, and after the truce Israel took the initiative and defeated the Arab armies. By the conclusion of the 1948 Arab-Israeli War, Israel had greatly expanded its borders and signed ceasefire agreements with all its Arab neighbors.

An exodus of Palestinian Arabs from Israel occurred during this war. Simultaneously, Jews exited Jerusalem by force, and Jewish residents of nearby villages and settlements, such as K'far Etzion, were massacred by Arab troops. Jews were not allowed to live in or visit Jerusalem from 1948-1967, and Jewish holy places in Jerusalem were vandalized during this period.

The causes are a source of dispute among historians: Some claim that the Palestinian villagers were forcibly expelled and others, that the villagers fled in fear before Israeli forces arrived. Whatever the reasons behind it, this exodus created the Palestinian refugee problem, which has remained unsolved. Many abandoned properties and villages were resettled by Jewish refugees from Europe and Arab lands. (See also: Aliyah Bet, Berihah, Sh'erit ha-Pletah, Jewish exodus from Arab lands)

One factor in the persistence of the Arab refugee problem was the refusal of any Arab government except Jordan to offer the Palestinian Arabs citizenship. Whereas other much larger refugee problems after World War II were eventually solved, this one persisted. Palestinians were defined as those who lived in Palestine between 1946-1948 or their descendants by the United Nations Relief Works Agency (UNRWA) which was created especially for the Palestinians. Aid was given by the United Nations, based on population figures, and refugee camps that had sprouted up in Egypt, Lebanon, Jordan grew as did the Palestinian population. Because the Palestinians did not become Egyptian, Lebanese, or Israeli, the number of Palestinian Arabs increased to several million.

Period 1949-1967 :

By the end of 1949, only 150 123 Palestinians remained within Israel. For this reason, the Israeli-Palestinian Conflict took a back seat to the broader Arab-Israeli Conflict during this time.

Palestinians played a crucial role in the Egyptian-Israeli conflict during this time. Beginning in 1950, Egypt began using fedayeen to conduct a war of proxy against Israel. These units of Palestinians—often trained and equipped by Egypt—would infiltrate across what was then the Israeli-Egyptian border at Gaza, and conduct guerilla raids against Israeli targets (mostly civilian in nature). In the first five years of the 1950s, "884 Israelis were wounded or killed by" Palestinian fedayin trained and sent into Israel by the Egyptians. The fedayin attacks was cited as being among the factors leading up to the Israeli decision to participate in the Sinai Campaign in 1956.

The scope of the Israeli-Palestinian conflict again broadened after Israel conquered the West Bank from Jordan and the Gaza Strip from Egypt during the Six-Day War.