[The following, by bataween, is crossposted from Point of No Return.]

On Monday evening, Israel's parliament, the Knesset, quietly passed a bill that could change the Middle East agenda forever.

Up to a million Jews were forced to leave Arab countries and Iran in the decades following the foundation of the State of Israel in 1948, due to state-sanctioned persecution and violence. Today only some 4,000 Jews are left in the Arab world, bringing to an end a Jewish presence that in many cases pre-dated Islam and the Arab conquest by 1,000 years.

The bill has taken two years, since its initiation by MK Nissim Ze'ev of the Sephardi Orthodox Shas party, to become law. The new law aims to protect the rights of Jewish refugees from Arab countries and Iran in future peace negotiations in the Middle East. The bill defines a Jewish refugee as an Israeli citizen who left one of the Arab states, or Iran, following religious persecution. It stipulates that the Israeli government must include Jewish refugee rights, notably compensation, in all future peace talks.

Stanley Urman, the head of the advocacy group Justice for Jews from Arab Countries, welcomed the Knesset decision, saying: "The world must realise that Palestinians were not the only Middle East refugees; that there were Jewish refugees who also have rights under international law. This recognition is good for the State of Israel and it is good for the people of Israel."

Why is this bill so important? Because it holds the key to real peace in the Middle East. So many efforts at making peace between Israel and the Palestinians have run aground on the rock of the Palestinian 'right of return'. Not content with a Palestinian Arab state in the West Bank and Gaza, even the 'moderates' of the Fatah camp have been reluctant to recognise Israel as a Jewish state. The reason is that they are unwilling to drop their demand for the Arab refugees of 1948 - who now number upwards of four million if you include their descendants - to return to their homes in what is now Israel. This demand amounts to no less than the destruction of Israel by demographic means and the de facto creation of two Palestinian states, one in the West Bank, and one in place of Israel.

For too long the Arab refugees have occupied centre-stage in the Arab-Israeli drama. They are seen as the main victims of an Israeli injustice. By introducing the Jewish refugees into the picture - they and their descendants make up just under half the Jewish population of Israel - it will now be accepted that there were two sets of refugees, both with rights, who exchanged places in the Middle East.

Some people will say, why not also give the Jewish refugees a 'right of return' to Arab states ? Firstly, there is no precedent for such a return. The seven million Hindus and Muslims who swapped places in the Indian-Pakistani war of 1947 constituted a permanent exchange. So did the Greeks expelled from Turkey and Turks driven from Greece after the end of the First World War.

Secondly, apart from the chaos and turmoil generated by a mass population movement of this type, a Jewish 'right of return' to countries which spat out their Jews is like asking a prisoner who has tasted freedom to go back to jail. Three generations have now been happily resettled in Israel and the West. They have have lost most of their cultural and linguistic links with the Arab world. No Jew wishes to return to an Arab country, except perhaps as a tourist. These lands are not friendly, nor are they safe for Jews. Even in lands of apparent stability, things can change overnight. In Morocco, even the remaining 3,000 Jews have their suitcases ready-packed in case of sudden regime change.

That's why the bill's emphasis on compensation is quite deliberate. It is saying: let both sets of refugees stay where they are - the Jews in Israel and the Arab refugees in Arab states. Let both sets receive compensation - case closed.