The Arab League Peace Initiative says this about the Palestinian right of return:
II- Achievement of a just solution to the Palestinian refugee problem to be agreed upon in accordance with U.N. General Assembly Resolution 194.
And what does UN resolution 194 say about refugees?
11. Resolves 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…
Maurice Ostroff, in his piece Factoids and the Palestinian Right of Return, has made some very good points about this:
…since resolution 194 specifically applies only to refugees who wish “to live at peace with their neighbors”, it does not apply to the Palestinians since both Hamas and PLO charters emphatically reject peace with Israel. [both Hamas and PLO documents can be found at Know Your Enemy — ed.]
The official Palestinian Media Center web site confirms that promised changes to the PLO Charter have not been made. Article 9 of the PLO covenant still plainly declares that armed struggle is not merely tactical, it is the overall strategy. Article 19 rejects the 1947 UN partition, implicitly rejecting the Quartet’s proposed two-state solution. Moreover it advocates destruction of the entire Jewish state. Article 20 deems the Balfour Declaration and the British Mandate null and void.
Further, Ostroff points out that the resolution mentions only actual refugees, not their descendents. And full implementation of this resolution would also require compensation to the hundreds of thousands of Jewish refugees forced to flee Arab states.
So maybe an agreement based on resolution 194 would not be so bad after all.