Its wasnt 700.000 pals, but something like 350.000 (almost half of the number you gave) and most part of them left Israel's boarder calling the call of the Arab league, to clean the way to the invasion and destruction of the newborn country. As everybody know's, the arabs lose the war, so why should Israel allow a ppl that if not openly worked with the enemy side during the war supported them, to retun inside its boarders? "Land grab" "violation of international law".....what about killing a whole nation and throwing their bodies into the sea? Thats acceptable to you in the case of Israel?
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France, U.S. target Islamic State with two strikes in Iraq (Reuters)
from the article: Palestinians under world pressure not to declare state unilaterally