Let's consider the following hypothetical scenario: At the end of World War I the Allied Powers decide to offer national self-determination to the Arab entity of the Ottoman Empire, and give their blessing to the founding of a single, broad Arab state in the region. Immediately upon establishment, this new state halts Jewish immigration to the Land of Israel and begins a relentless persecution of the local Zionism movement, claiming that it threatens to rip the historic land from the Islamic nation.
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Following waves of illegal Jewish immigration, supported by those in the international community who reject self-determination for the Arabs at the expense of the Jews, the Zionist yishuv rebels against the Arab rulers. In the wake of a protracted war of independence, the Jews defeat the foreign ruler and carve out a Jewish national homeland alongside the Arab one.
In the course of this war, the Arabs living in the Land of Israel flee to the safer regions of the Arab state, while the Jewish inhabitants of the Arab state flee to the Jewish territory. After the war these demographic trends are completed and formalized in a population transfer agreement, along the lines of the Greek-Turkish one in the 1920s.
If the national struggle for the Land of Israel/Palestine in the last century unfolded according to this scenario, the comparison between the issue of Palestinian refugees and Jewish refugees from the Arab lands, which Israel's National Security Council is trying to create, would have been entirely acceptable. With all due respect to the pain experienced by the Palestinians, it is entirely possible to have envisioned a parallel refugee situation in which Jews from the Arab entity returned to the Jewish national homeland, while Arabs living in the Land of Israel returned to the Arab state.
Luckily for Zionism, a sovereign Arab state did not arise in place of the Ottoman Empire. Instead the Arab territories were severed by the Western powers into separate countries in a process that strengthened tribe loyalties and deepened the cultural alienation among different Arab populations, creating or shaping new Arab national identities based on local territory.
Despite shared language and religion, there is more that separates the Arabs of Palestine from the Arabs of Morocco, Egypt or Iraq than unites them, just like for hundreds of years there was more that separated Bavarian Germans from Saxon Germans, or Tyrolean Italians from Neapolitan than united them.
In this context, it’s understandable that the Palestinians -- who did not reject the justified Israeli demands that Arab countries compensate Jewish refugees -- do not accept the comparison between Jewish refugees from Arab lands and Palestinian refugees from the Land of Israel/ Palestine.
Despite absorption difficulties and exclusion at the hands of the Ashkenazi establishment, the immigrant-refugees from Arab states ended up in their national and political homeland. In contrast, the Palestinian refugees have continued their refugee existence in Arab states, both because of rejection by the residents of those states, whose ethnic identities and interests have nothing in common with the Palestinians, and because of their own ongoing connection with their homeland.
That being the case, it is best not to blur the reality. In the eyes of Palestinians, Palestine, not other Arab states, is their national homeland – and not just in a symbolic way. It is incumbent upon Israel to recognize that reality, just as it is incumbent upon the Palestinians to recognize the parallel reality that the entire Land of Israel will remain, in the eyes of Jews, their national homeland – and not just symbolically.