Alright.
To whom should payment have been made?
To the prior owners?
OK
Do they have a deed?
Yes, the Palestinians have registered ownership of all the land.
That is because the Ottoman Empire needed records so they could know who to tax.
The problem is after Menachem Begin blew up the British peacekeepers in the King David Hotel, then Irgun, Stern, and Lehi started massacring native villages like Deir Yassin.
So then millions of Palestinian fled the violence, to Egypt, Jordan, Lebanon, and Syria, and Israel has never allowed them to return to their homes.
{...
The
Palestinian right of return is the political position or principle that
Palestinian refugees, both
first-generation refugees (c. 30,000 to 50,000 people still alive as of 2012) and their descendants (c. 5 million people as of 2012), have a
right to return and a right to the
property they themselves or their forebears left behind or were forced to leave in what is now
Israel and the
Palestinian territories (both formerly part of the
British Mandate of Palestine) during the
1948 Palestinian expulsion and flight (part of the
1948 Palestine war) and the
1967 Six-Day War.
The right of return was initially formulated on 27 June 1948 by United Nations mediator
Folke Bernadotte. Proponents of the right of return hold that it is a
human right, whose applicability both generally and specifically to the Palestinians is protected under
international law. This view holds that those who opt not to return, or for whom return is not feasible, should receive compensation. Proponents argue that Israel's opposition stands in contrast with its
Law of Return that grants all Jews the right to settle permanently, while withholding any comparable right from Palestinians. The
government of Israel, and its supporters, state that Palestinian refugees do not have the right of return under international law.
There is also significant concern about the demographic impact of the return of 5 million Palestinians to Israel, whose population is nearly 10 million. Some Palestinians, including
Yasser Arafat, have supported limits on the right of return to accommodate Israel's demographic concerns.
...}
en.wikipedia.org