Palestinian Refugee Compensation and Israeli Counterclaims for Jewish Property in Arab Countries




Unlike its demands for Holocaust reparations, Israel’s compensation claims for properties that Jews left behind in the Arab world have aimed not to provide individual financial reparations, but rather to counter and offset Palestinian refugees’ claims for restitution and the right of return. In U.S.-sponsored negotiations in 2000, Israel announced it would drop its counterclaim policy and agreed with the Palestinians that individual compensation would be paid out to all sides from an international fund. More recently, however, a new counterclaim strategy has emerged, based not on financial reparations, but rather on an argument that a fair population and property exchange occurred in 1948. By pursuing this strategy, Israel and international Jewish organizations risk exacerbating tensions between European Jews who have received Holocaust reparations, and Arab Jews angry that their claims are held hostage to diplomatic expediency.


ON 1 APRIL 2008, the New York–based coalition Justice for Jews from Arab Countries (JJAC) announced that the U.S. House of Representatives had passed Resolution 185 (H.Res. 185), a nonbinding “sense of the House” resolution concerning the fate of 800,000 Jews who left Arab countries in the wake of the first Arab-Israeli war of 1948, some without their property. Describing these Jews as “refugees,” the resolution called on the U.S. president to ensure that American representatives participating in international fora refer to the plight of Jewish refugees from Arab countries whenever mention is made of the 1948 Palestinian refugees. H.Res. 185—which JJAC helped to write—was not an effort to demand compensation for Jewish property losses in the Arab world, but rather a tactic to help the Israeli government deflect Palestinian refugee claims in any final Israeli-Palestinian peace deal, claims that include Palestinian  refugees’ demand for the “right of return” to their pre-1948 homes in Israel.


The counterclaim strategy is not new. Indeed, it had formed the bedrock of Israeli refugee compensation policy since 1951, when Israel announced that it would factor in property losses sustained by Jews emigrating from Arab countries when the time came to compensate Palestinians. The onset of the Israeli-Palestinian peace process in 1993, however, cast the compensation issue in a new and sharper light. At Camp David in 2000, and at Taba in 2001, Israeli negotiators proposed the establishment of an international fund capitalized with Israeli and foreign contributions to pay compensation to claimants from all sides of the conflict.


For years, Palestinians had steadfastly rejected any linkage of their claims to those of Jewish emigrants from Arab countries. After the Camp David and Taba meetings, however, they agreed to the international fund proposal. Some supporters of Israel, worried about the implications of this agreement, began to refashion the 1951 counterclaim policy with the intent of obstructing the implementation of the right of return, which Israel and its supporters viewed as far more threatening than demands for financial compensation. H.Res. 185 is but the most recent fruit of this diplomatic campaign. Yet, by using a counterclaim strategy to thwart Palestinian demands for compensation and the right of return, Israel risks exacerbating longstanding grievances between its Mizrahi/Sephardic ( Jews of Middle Eastern, North African, and Asian descent) and Ashkenazi ( Jews of Central and Eastern European descent) communities. The ultimate battle may end up pitting Jews who left Arab countries against European Jewish Holocaust survivors in a divisive argument over who has received the lion’s share of international Jewish compensation funds. This is because—unlike demands for Holocaust reparations, compensation, and restitution that Jewish groups and the State of Israel have pursued vigorously for decades—JJAC’s campaign on behalf of Mizrahi/Sephardic Jews did not seek restitution for properties seized by Arab governments; nor did it pursue compensation for individuals. The differences between these two compensation schemes stem from debates and decisions dating back to the first months


of Israel’s existence, as well as diplomatic developments of the last fifteen years.


Linking Jewish and Palestinian Compensation


Soon after the 1948 Arab-Israeli war ended and the full dimensions of the Palestinian exodus became apparent, Israel agreed to compensate Palestinian refugees for property they had been forced to abandon during the hostilities. This commitment was quickly qualified, however: Israel would pay compensation only for individually owned land and real estate, not for communal and collectively owned land or moveable assets such as household goods, farm animals and tools, and factory inventories. In 1951, the Israeli government first articulated the linkage of Palestinians’ property losses to property losses sustained by over 250,000 Jews from Arab countries who had entered Israel between 1948 and 1950. …


MICHAEL R. FISCHBACH, professor of history at Randolph-Macon College, is the author of Records of Dispossession: Palestinian Refugee Property and the Arab-Israeli Conflict (Columbia University and the Institute for Palestine Studies, 2003). His new book, Jewish Property Claims against Arab Countries, was published by Columbia University Press in August 2008.