They were displaced by Israeli military forces during the 1948 and 1967 Arab-Israeli wars and now live in various countries, predominantly Jordan.
The events of the 1948 war - known in the Arab world as the al-Nakba (Catastrophe) - led to an exodus of Palestinians. These refugees, together with their descendants, constitute the Palestinian diaspora, who now number more than four million around the world (UNRWA 2003).
There are three main groups of refugees:
1) Those who were made refugees in 1948 outside Israel.
2) Those who were internally displaced and remained within the areas that became Israel (Palestinians with Israeli citizenship)
3) And those forced off their land in the West Bank and Gaza Strip in 1967.
Two-thirds of all Palestinians are refugees. They make up around one third of the world's refugee population and are also one of the oldest refugee groups.
The root cause
The immediate historical causes of their dispersal stem from the creation of Israel in 1948 in Palestine. In particular three factors: the 1917 (British) Balfour Declaration that codified the notion of a national home for the Jews in Palestine; the 1922 international mandate granted to Britain by the League of Nations to carry out the mass immigration and empowerment of European Jews in Palestine; and the 1947 United Nations partition plan that ordered the creation of a Jewish state against the wishes of the majority of the population in Palestine.
Zionism - the political movement of creating a Jewish homeland in Palestine - propagated the expulsion of the Palestinian Arab population.
But to this day, many Israelis claim that Palestinians left of their own free will. However, as early as 1937 Zionist leaders were lobbying the League of Nation's Palestine Royal Commission headed by Britain's Lord Peel - the body that recommended partition - and, via a secret memorandum, proposed the "transfer" of the Palestinian Arabs to then Transjordan.
The Palestinians, naturally, were vehemently opposed to Britain's enforcement of the "national home" policy and their increasing demonstrations and protests sparked the first Arab revolt.
At the time of the British mandate in 1922, the Jews accounted for less than 13% of Palestine's population.
But by 1948 (the year of Israel's creation) the policy of mass Jewish immigration, together with the expansion of the original mandated borders through conquest, had increased their numbers to more than 80%.
In 1947, when the UN partition resolution number 181 was adopted, the Zionist leadership had begun to execute its plan, the notorious Plan D. According to the Israeli historian Ilan Pappe, its purpose was not only to expel as many Palestinians as possible but to rapidly seize control of government offices, public institutions and services.
By 1948 and Israel's so-called War of Independence, Plan D had become a part of official Israeli policy, which decreed that any village or town refusing to surrender to the new state would be destroyed.