One of the main reasons for the emphasis on the 2002 Arab Peace Initiative as a basis for a future two-state peace process is that it also entails, in the view of the United States and the European Union, an expression of the Israeli position on the contentious issue of the Palestinian right of return. The initiative says on this point that a joint solution by the parties to the problem of Palestinian refugees should be “agreed upon in accordance with UN General Assembly Resolution 194.” While the initiative is based on a resolution that calls for the return and resettlement of Palestinian refugees to their pre-1948 homes, it still stipulates that the resolution of the issue be agreed upon with Israel.
For the Palestinian national leadership, this is the crux of the conflict. The return of the refugees is the heart of their historical narrative, namely, that Israel was established by robbing the Palestinian inhabitants of their land and homes. Peace and justice can only prevail in this with the return of Palestinian refugees from their diaspora. For Israel, this amounts to national suicide.