[SJackson]

Israel should never have been pressured to return the Sinai without settling the refugee issue. Probably the most geographically feasable proposal for a state consisted of southern Gaza and a contiguous portion of the Sinai encompassing Al Arish. Won't happen now. But you're right, peace with either Egypt or Jordan is impossible without resolution of the refugee problem. IMO, they should be settled where they are, in Jordan, Syria, and Lebanon, not returned to the West Bank if a state does break out.

The alternative (I don't think Jordan would agree either, but they could be prodded) would be a unilateral separation, creating a state in Gaza and part of the West Bank. Terrorists expelled, peaceful palestinians stay where they are, but are citizens of the new "palestine", rather than Jordan, but not Israel.

[My2Cents]

Israel should never have been pressured to return the Sinai without settling the refugee issue.

You're 100% correct. I don't know the history of it, but they probably thought that if they negotiated in good faith, got an initial agreement with Egypt, that would be followed by good faith efforts to solve the refugee problem. My sense, though, is that many of the people in the West Bank, and perhaps Gaza, aren't "refugees," but Arabs from other Arab nations attracted by Israel's economy. "The Palestinian People" is something of a myth.