The Arab states could built them a great nation with all the money they are paying for terrorism against Israel
The Arab states have a lot of land but most of it is desert. Iraq has 11.5% arable land, Egypt 2.9%, Jordan 2.3%, Libya 1%, etc. Plus some of them are already pretty crowded—Egypt has more than 100 million inhabitants. Where the Palestinian refugees settled in large numbers it has caused major problems for the host countries (Jordan and Lebanon). Jordan gives them citizenship but I think elsewhere they remain foreigners.