In the spring of 1949, the Palestine Conciliation Commission created by the General Assembly in Resolution 194 (III) invited Israel and the Arab States to attend talks in Lausanne. In separate meetings with the parties, the Conciliation Commission dealt also with the question of the refugees. Excerpts from its report on the talks follow:
The Refugee Question
1. Repatriation, resettlement and rehabilitation
7. The delegation of Israel stated on 28 July that, in response to the views of the Commission and in order to facilitate the task of conciliation, the Government of Israel agreed on the following points: the problem of refugees should be placed as the first item on the agenda of joint discussions of a general peace settlement; on tile initiation of such discussions, the Israel delegation would be prepared to convey to the Commission and to the Arab delegations the total figure of refugees which the Government of Israel would be ready to repatriate; in the view of the Government of Israel, such repatriation must form part of a comprehensive plan for the settlement of the entire refugee problem; and this repatriation would be put into effect only as an integral part of a general and final peace settlement. The Israel delegation also expressed the wish that these negotiations should be carried out directly with the Arab delegations.
8. On 2 August, the Arab delegations stated to the Commission that, understanding that the Israel delegation would advance concrete proposals within the framework of a final solution of the refugee problem and that these proposals would be considered as a first step towards stabilization of the situation in Palestine, and considering such a course to be in the spirit of General Assembly resolution 194 (III) and the Protocol of 12 May 1949, they agreed to discuss the Israel proposals. They stated that this acceptance in no way prejudged acceptance of any particular plan.
9. Following the reply by the Arab delegations, the delegation of Israel submitted its proposals to the Commission at a meeting on 3 August. After a few general remarks, the Israel representative stated that his Government was prepared to make its contribution to the Solution of the refugee problem. This contribution would be limited by considerations affecting the security and the economy of the State. Thus, the refugees would be settled in areas where they would not come in contact with possible enemies of Israel moreover, the Government of Israel reserved the right to resettle the repatriated refugees in specific places, in order to ensure that their reinstallation would fit into the general plan of the economic development of Israel. Subject to these conditions, the Government of Israel would be prepared to accept the return to Israel in its present limits of 100,000 refugees, in addition to the total Arab population existing at the end of the hostilities (including those who have already returned since then), thus increasing the total number of that Population to a maximum of 250,000. This repatriation would form part of a general plan for resettlement of refugees which would be established by a special organ to be created for the purpose by the United Nations.
10. The Commission, considering the Israel delegation's proposal as unsatisfactory, limited itself to communicating that proposal unofficially to the Arab delegations for their information. On 15 August, the Arab delegations transmitted to the Commission, also unofficially, a memorandum containing their observations on the proposals submitted to the Commission by the Israel delegation on 3 August. In the opinion of the Arab delegations, the Israel proposal was contrary to resolution 194 (III), as well as to the Protocol of 12 May 1949. They considered that under the terms of the Protocol the Israel proposal could bear only upon the territories allocated to Israel according to the map attached to that document. The Arab delegations protested the contention of the Israel delegation that the settlement of Arabs in Israel territory must be subordinated to economic and strategic considerations. They recalled, moreover, the memorandum addressed by them to the Commission on 23 May, requesting the repatriation of all refugees originating in territory allocated to the Arabs or to be internationalized, according to the map attached to the Protocol of 12 May 1949. If the Israel proposal were to be interpreted as applying exclusively to refugees originating in areas allocated to Israel on the above-mentioned map, the Arab delegations would not object to its adoption as a basis for discussion of the disposition of those particular refugees. Finally, the Arab delegations favoured compensation in kind for the refugees who might not return to their homes; this indemnification might take the form of territorial compensation within the terms of the Protocol of 12 May. The text of the Protocol was attached as an annex to the third progress report of the Commission (A/927).