Israel’s policy has long been to accept those who can document that they were resident owners at the time of the flight of many Arabs from what is now Israel. This is admittedly a small number because of the inclination of Arabs to hold the majority among them in a kind of peasant serfdom, mere tenants.
Jews were forced to flee the Arab lands as certainly as Arabs were forced to flee Israel. Some quid pro quo should, in fairness, be allowed Israel. Since Israel took in the Jewish refugees, the places from which they departed should in fairness, accept responsibility for the Arab refugees in proportionate numbers.
In addition to the forcing Jews to flee, Christian Arabs were forced to flee Israel and Palestine and other places in the Arab world. Eastern Jerusalem, Bethlehem and Nazareth were, prior to the period from 1949 to 1967, majority Christian. During the time of Jordanian administration of East Jerusalem and the west bank, the religious complexion of these places were changed from majority Christian to majority Muslim. These Christian Arabs fled mostly to the U.S., Latin America and Australia.
In fairness, Israel could annex East Jerusalem and perhaps also Bethlehem and/or Nazareth, and hold out a right of return of the Christian Arabs and such of their descendants to the second that generation would choose to return to their homeland upon a peace settlement and the promise of religious liberty by Israel.
While we are prohibited from making any presumptions regarding the “final status” of Jerusalem, per the Camp David agreements, at some point that becomes a dead letter for lack of good faith on either or both parties. At some point, the Israelis should consider a unilateral withdrawal from the West Bank to whatever borders Israel considers fair and workable.