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Refugees / Practical Issues:


Compensation is a central part of a comprehensive solution to the Palestinian refugee issue. Previous negotiations focused on two types of compensation: Compensation for refugeehood or suffering — sometimes referred to as ‘fast track’ — is essentially per capita compensation that all eligible (however the parties agree to define them) refugees would be entitled to. Compensation for material and property loss — sometimes called slow, or evidential, track — aims to compensate refugees for specific assets left behind, and presents a unique challenge in terms of providing evidence for assets that date back decades and even centuries.

Drawing on international law and the 1948 United Nations General Assembly Resolution 194, the Palestinians have pushed for open-ended compensation for all Palestinian refugees, stressing that Israel itself must take responsibility for funding. Israeli negotiators have demanded that the international community play the primary role in funding compensation, and only in a one-time lump sum to Palestinians who previously owned land within Israel. Although the parties agree in principle on compensation for assets and suffering, there is considerable disagreement over how refugees should prove past ownership of assets, and how the value of those assets should be calculated.

Some proposals advocate that an agreement also include funds to repay the countries who have hosted the refugees for decades. While the need for such compensation is debatable, it


Figures based on Aix Group Report SummaryEconomic Dimensions of a Two-State Agreement Between Israel and Palestine, Vol II: Supplementary Papers, 2010.

would certainly incentivize these countries to support the peace deal, and perhaps encourage them to allow refugees to remain in their countries as permanent residents.


One word of caution: There is a big question mark regarding the viability and wisdom of varying compensation schemes. In all likelihood, the amount of funding that would be available for compensation would be significantly less than what refugees expect, raising the risks of a backlash among disillusioned or disappointed refugees. Estimates for required funding for refugee compensation have differed greatly — from as little as $3 billion and as high as $200 billion. The AIX Group, comprised of Israeli and Palestinian economists and scholars, estimate that the total amount would be $55-85 billion.

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