UN Resolution 194 remains a benchmark document in this conflict. It was passed in December 1948, soon following the massive expulsion of Arab populations from Palestine. It affirmed the right of the refugees to return to their homes as soon as possible and receive compensation.
Compliance with Resolution 194 became a condition for Israel's admission to the UN in 1949, which Israel pledged to fulfill. However, it has never done so.
The demand has been oft repeated by the UN and has been uniformly ignored by Israel, while the US has protected them from UN sanctions or possible expulsion from the UN for violating this resolution, its pledge to the UN, the UN charter, the Universal Declaration of Human rights to which all member states are obligated, and numerous other UN resolutions.
To this day Palestinians continue to demand Israeli compliance with this resolution, and the right of refugee return has since been re-affirmed consistently in many other conflicts, in Cambodia, Rwanda, Croatia, Bosnia-Herzegovina, Guatemala, Northern Ireland, Kosovo, Sierra Leone, Burundi, and Darfur.
However, Israel steadfastly refuses to consider this and excludes representatives of the Palestinian diaspora from peace negotiations. To acknowledge the truth of the nakba would call into question the legitimacy of their state and their much proclaimed "right to exist." Legally and morally, their "right to exist" would be a hard case to make in view of the historical evidence, and they would be understandably reluctant to argue it before the International Court of Justice.
Relevant sections of Resolution 194 are cited on the Admission to UN page.
Demand Freedom, Justice and Equality in the Holy Land