The Other Side of the Refugee Coin

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The last time Munira Mussafe saw her elegant house on the banks of the Tigris, it was through her tears. She and her family had to flee Iraq in 1951, leaving a spice warehouse burned out in anti-Jewish riots, a safe full of banknotes and jewels, and dozens of expensive, handmade Persian carpets. From prosperity in Baghdad, Mussafe and husband Salim brought their six children to a life of miserable poverty in the new state of Israel. Every day, Mussafe lamented the riches she left behind, even as Salim struggled to run a small dairy farm in the coastal town of Herzliya. Her daughter Judith, who fought decades of depression over the decline in her parents' status, hanged herself in 1988. Mussafe, 78, knows she can never recover the house or her daughter, but she believes new moves in the peace process with the Palestinians may help her win back the $2 million in cash and assets she left behind. "It's coming to me, just like it's coming to the Palestinians," she says. "Every refugee should be compensated."

Mussafe has a powerful ally in President Bill Clinton. In an interview with Israeli television, Clinton said the failed Camp David summit, which ended two weeks ago, at least brought good news for the more than 580,000 Jews who immigrated to Israel from Arab countries. Palestinian negotiators agreed that these Jewish refugees should be compensated for the property they left behind or were forced to give up, he said. The President's comments reopened a little-noted but highly nettlesome area of dispute between Israel and the Palestinians which is sure to take on even greater urgency as the two sides move toward a final settlement. As the Palestinians negotiate for billions of dollars in compensation for their refugees, Israel will press for billions more to be paid to the Jews from Arab countries, probably by the kind of international fund suggested in Clinton's remarks. If the compensation is forthcoming, it could help the Israeli government sell an entire peace deal to voters of Middle Eastern and North African origin, who are a slight majority among Israelis. They're also largely right-wing and usually suspicious of prospective agreements with Arabs. "It will be very important," says Justice Minister Yossi Beilin. "It could help people accept the agreement. It would be something tangible."

Jews all over the Arab world faced persecution, fear and anti-Semitic attacks after the establishment of Israel in 1948. Communities that were 2,000 years old packed up en masse in the following few years and moved to Israel. Some of the expulsions were accompanied by government seizures of property, from the Iraqi regime in 1951 to Muammar Gaddafi's Libya in 1972. The Jews left behind them small goldsmiths stores on the Street Called Straight in Damascus and rich Italianate villas in Alexandria. According to Mordechai Ben-Porat, a former parliamentarian who, as a Mossad agent, helped bring refugees out of Iraq, the value today of the property abandoned or confiscated would be about $15 billion. That would dwarf the $1.25 billion compensation pledged by Swiss banks to Holocaust victims. Unlike the Palestinian refugees who were often kept in poverty by their Arab hosts and in some cases denied the right to find jobs outside their squalid camps, Jews from Arab countries were given citizenship in their new land. Still, these Jews, known as Mizrahis from the Hebrew word for east, faced discrimination from the European elite in Israel and lived in rough camps of tents and tin shacks. The towns that grew around those camps remain Israel's poorest neighborhoods. "We struggled to convince the world that there is another side to the refugee coin in this region," says Oved Ben-Ozair, chairman of the World Organization of Jews from Arab Countries, a group based in Tel Aviv. "With Clinton's statement, we succeeded."

The Palestinians argue it's the other side of a completely different coin and that most of the Jews came to Israel out of Zionist conviction, rather than as true refugees. Adel Dajani left his father's home in West Jerusalem's German Colony in 1948 when he was 17, fleeing the battle that raged then for the city. Now a retired banker who lives in Amman, Jordan, Dajani recently took his wife and daughter to the ornate sandstone house on a leafy street renamed Zvi Graetz, after a nineteenth century biblical scholar. The Israeli woman who lives there today had herself fled from Iraq. Briefly, she let Dajani inside. "I was taken by the shivers," he says. Despite the efforts of Yasser Arafat's negotiators, Dajani expects to receive little compensation for the 16 houses his family left in Jerusalem, and he believes the Jews who fled Arab lands should get nothing either. "A lot of them left of their own free will, not under the gun like us." Palestinian officials at the peace talks agreed to the idea of compensation for the Mizrahi Jews only on condition, they say, that the money comes out of an international fund. They fear Israel will try to cancel out at least some of what it owes the Palestinian refugees by netting it against payments due their Jewish counterparts. They are suspicious, too, that Israel will cite the estimated $11 billion it spent over four decades integrating the Jewish refugees to further cut the cash it will hand over to the Palestinians.

Many of the Mizrahi Jews harbor the same suspicion. They believe they may never see their compensation and that the Israeli government only floated the idea to trim its potential obligations to the Palestinians. "It's an elegant stunt by the Israeli government," says Yehouda Shenhav, a Tel Aviv University professor. They'd better hope Clinton isn't in on the trick.

With reporting by Jamil Hamad and Aharon Klein/Jerusalem