Of all the conflicting issues Israelis and Palestinians must resolve in the negotiations - including territorial claims, secure borders and the future of East Jerusalem - the Palestinian refugee problem in particular has the potential to stymie any pragmatic solution to the conflict. As Israelis and Palestinians renew direct talks, the European Union can and must begin to play a key role in helping the parties resolve this difficult and thorny issue.
The E.U. is uniquely suited to utilize its formidable economic resources and political clout to take the lead in initiating and facilitating such a resolution. In doing so, the E.U. would establish itself as an indispensable interlocutor in the effort to achieve a sustainable Arab-Israeli peace agreement, while at the same time enhancing its strategic and economic interests in the Middle East. Although European Union foreign policy chief Catherine Ashton should have been present at the launch of direct talks between Israelis and Palestinians in Washington last week, her absence should not be interpreted as an indication that the E.U. will not be critical to ensuring that the renewed peacemaking efforts succeed.
There is only one realistic solution to the refugee issue: compensation, resettlement and rehabilitation in a Palestinian state in the West Bank and Gaza. While majorities of Palestinians support a "right of return" to the State of Israel as a matter of principle, polls have shown that only a small number of refugees actually seek to return to Israel proper. Meanwhile, Israel has refuted the principle of "right of return" in every encounter with the Palestinians since 1988, consistently stating that sustaining its Jewish majority is a sine-qua-non to any agreement. Any solution must, therefore, be based on resettlement and rehabilitation in a future Palestinian state or in their current country of residences. Many Palestinian and Arab leaders have also previously conceded that apart from a symbolic number of refugees (20-30,000) returning to Israel proper as part of family reunification, the solution lies largely in the new state of Palestine. This formula would fulfill Palestinian aspirations to return to their homeland, albeit not their original homes. Such a solution would be consistent with the 1967 United Nations Security Council Resolution 242, which calls for "achieving a just settlement to the refugee problem" as well as with the Arab Peace Initiative, which calls for "a just solution to the Palestinian refugee problem to be agreed upon in accordance with U.N. General Assembly Resolution 194." It should be noted, however, that UNSCR 242 supersedes the non-binding 1948 United Nations General Assembly Resolution 194.
To change the political dynamics surrounding the renewed talks, the European Union should take the lead in beginning to create the means that would make such a resolution possible. European nations have championed the cause of Palestinian refugees for decades and traditionally have been a leading contributor to Palestinian projects, including collectively serving as the largest donor to the United Nations Relief and Works Agency for Palestine Refugees. Considering its substantial support for the Palestinians - as well as the Palestinian inclination to turn to the E.U. as a balance to the close US-Israeli relationship - the E.U. is uniquely positioned to influence the Palestinian position regarding the status of the 4.5 million Palestinian refugees registered by the United Nations. Facilitating a resolution would require ample capital, perhaps in excess of 10 billion dollars-far more than the €264 million allotted for UNRWA. Guaranteed money for refugee resettlement would provide an incentive for Palestinians to think practically about how to utilize such compensation constructively, rather than continue to use the issue as a political tool.
Of course, the Europeans cannot solve the refugee issue alone. The United States, Russia, China, the Arab states and Israel must also significantly contribute to this effort. It would also require close cooperation with the Palestinian Authority, Syria, Lebanon, and Jordan where many of the refugee camps are located. The Arab states in particular should provide logistical and organizational support. In addition, the Arab states can play a particularly important role in promoting a new narrative regarding the "right of return" to a newly established Palestinian state. President Obama's comment at the launch of direct talks that "A lot of times I hear from those who insist that this is a top priority and yet do very little to actually support efforts that could bring about a Palestinian state," was a call on the Arab states to match their rhetoric in support of peace with greater action-political and material-- to achieve it. The Arab states that have historically used the plight of the refugees to cover for their own shortcomings and misguided policies now have an opportunity to answer the President's call while benefiting the people who have been living in squalid conditions for decades, and helping to facilitate a resolution of the Israeli-Palestinian conflict. Such a measure would be welcomed by Israel in that it would mitigate calls for a return to Israel proper.
The resettlement of the refugees would require large-scale economic investment for the creation of jobs, contracts for housing and schools, and other measures to ensure that existing Palestinian communities can absorb an influx of new Palestinian citizens. To this effect, the E.U. should support the P.A.'s creation of a new ministry tasked with resettling refugees and aiding in their transition. Such an initiative is fundamentally different than any previous attempts to address the Palestinian refugee issue, as it is premised on beginning to facilitate a resolution to the issue even before negotiations are concluded. The re-launch of direct negotiations offers the E.U. an opportunity to begin promoting this concept as their official position, emphasizing that this is not a controversial idea. All of the negotiations between Israelis and Palestinians in the past have been based on the premise of UNSC 242 and refugee resettlement in a future Palestinian state.
Some Arab leaders who have been involved in previous negotiations argue that while the solution rests with resettlement and compensation, it would be difficult to advocate publicly such a solution in advance of reaching a comprehensive agreement fearing that it would instigate public backlash. But providing the means to settle the refugee problem now will begin to change the current situation of the refugees and at the same time serve to modify the public perception about the practical meaning of the "right of return." Moreover, such an approach would bolster Palestinian Authority Prime Minister Salaam Fayyad's plan to establish a de facto state in the West Bank and Gaza by next year and many refugees can start returning to their homeland and investing in their new communities. For the 60% of refugees currently living in camps in the West Bank and Gaza, this will mean working with the P.A. in an organizational capacity to pull their families out of refugee status and into proper housing.
Clearly, resolving the Palestinian refugee problem will require a substantial amount of money. But above all, it will require political commitment to navigate through the thickets of a highly emotional issue in order to find a practical solution. There is no party better suited to lead this effort than the European Union, and no better time to start than now.