The Jews who fled from Arab countries should be compensated for the property they left behind. There were, for example, valuable Jewish-owned properties in Cairo. But nobody disputes that Cairo is in Egypt, and Egyptian law is valid there. Failure to recompense the Jews is unjust, but it is not illegal. This stealing of Palestinian property is every bit as unjust; it is also illegal. Under international law (reinforced by at least 6 UN Security Council resolutions), Israeli law does not apply in East Jerusalem. So quite apart from flouting Jewish respect for fairness (every good Jew should be up in arms about that), this is also totally illegal. But hey, does that bother the Israeli Government?
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from the article: State eyes 'legal' takeover of abandoned East Jerusalem properties