SolLution of the Palestinian refugees (PR) is integral to the ongoing peace process between the Arab countries and Israel as well as the negotiations between Israel, and the Palestine Liberation Organization (PLO) . The refugee issue is politically significant because a majority of the Palestinians are classified as refugees . They f clrm large conglomerations in the host countries in which they reside and therefore can have a political impact if they were to participate in political activity. Furthermore, the Palestinians have become politically alert especially since the intifada and it would be unwise to ignore them in any solution to the Arab Israeli conflict that may be pursued. The refugee question, however, is important in economic and social respects as well. The Palestinian refugees embody a large stock of human capital which is underutilized primarily because of their political status in the countries of current residence and because of the ongoing conflict with Israel. Their mobility is restricted in most cases, their economic: decisions are not free and their opportunities are not based on merit. As a result their product is presumably