At the time, most returnees thought or perhaps hoped that the Israeli occupation was about to end.
Now, a decade after the Oslo accords, many have discovered the stark gap between reality and their dreams.
A few years ago, a young American-Palestinian mother lost her life by a random Israeli bullet, and her Palestinian husband, a journalist, was injured.
Others had their businesses ruined as a result of widespread Israeli army vandalism of Ram Allah nearly two years ago.
Yet, despite this, not every returnee is disenchanted or wants to go back to the US.
But it is clear there is no comparison between the easy lives they led in America and the harsh reality they continue to face in the occupied Palestinian territories.
Hanan Ahmad was only six years when she returned with her family from Houston to their native village of Surda, near Ram Allah in 1995.
Many Palestinians emigrate to
escape Israel's harsh rule
She never thought things would be this bad. "We are suffering a lot, especially by those ugly roadblocks, but we belong to Palestine and Palestine belongs to us," Hanan says defiantly.
She admits that "life there" is much easier than "here". However, Hanan says she would not think of abandoning Palestine for the sake of "some big Macs, hamburgers and Kentucky fried chickens".
"This is our country, this is our land. If everyone is giving up, then it is going to be like giving them (Israel) our land on a silver platter," she says.
However, there are Palestinian-Americans who find it too difficult to endure the roadblocks, checkpoints, curfews and recurrent Israeli army incursions into the occupied territories.
Dozens of Palestinian-American families simply "can't stand it any longer", says Mahmud Amra, principal of the Friends school in Ram Allah.
He told Aljazeera.net that many families, which had come to Ram Allah after the Palestinian Authority was established, have returned to the United States.
Amra seemed to be referring to the "more Americanised" returnees for whom coping with the "harshness of the occupation" was just too much.
He believes, however, that those who went to the US will eventually come back to Palestine.
"I don’t regret my decision to return home even for a second. It was the right thing to do"
founder, Palnet ISP
Hanan’s mother Dam Eliz Abd Allah agrees. She argues that religiously motivated returnees stayed on while the more secular ones went back to North America.
But Mrs Abd Allah’s two daughters, Ilham and Hiyam, have themselves returned to college in Texas where Ilham is studying pharmacy and Hiyam medicine.
They both are planning to come back to Ram Allah after graduation. "That is why I am staying here," she says.
Yet, it would be incorrect to assume that all those who stayed on have done so because of ideology or patriotism.
Some, like Maan Bseisu, who have been successful in their careers, see no financial need to go back to the United States.
A former Silicon Valley electronics engineer, Bseisu says the situation is worse than what he had imagined. "We all had anticipated that things would be bad, but we never thought they would be this bad."
He personally knows many "business people" who have returned to North America, to get away from the "intolerable conditions" in the West Bank.
"I don’t blame them … you can’t lead a normal life under occupation," he says.
Israel's separation wall has made
the situation worse for Palestinians
Since his return in 1995, Bseisu has founded Palnet, which has grown to become the largest internet service provider in the West Bank.
"This alone should vindicate my homecoming," he says.
"I don’t regret my decision to return home even for a second. It was the right thing to do. I would have still taken that decision even if I had known what I know now," he said. "It is my country; it is as simple as that," Bseisu says.
alnet is not the only success story.
Al-Najah Comprehensive School is another. It combines a US educational style with an Arab-Islamic originality, says its principal and founder, Aida Khairiya.
The private girls' school, considered one of the best in Ram Allah, was founded nine years ago primarily to accommodate hundreds of Palestinian American girls who returned with their families for good.
"When they came, they knew very little Arabic and their knowledge of Islam was rudimentary at best, so it was a formidable challenge to transform them," says Khairiya.
"But we did it and I am proud of that," says the former Milwaukee resident. "Now, I am glad to tell you that we have an entire class of American-born and American-bred girls who are learning Tajwid (proper recitation of the Quran)."
At Al-Najah school, Hanan Ahmad and as many as 700 other US-born Palestinian girls are receiving their basic learning.
"It is this hope for a future without occupation, without roadblocks and without curfews that gives us strength and keeps us going"
Dam Eliz Ahmad,
teacher, al-Najah school
"Not only do we give them good education in science, math and literature, but we also teach them moral values and virtues of Islam. We believe education and morality should go hand in hand."
Notwithstanding Khairiya's upbeat and high morale, it is abundantly clear the most Palestinians, including Palestinian-Americans, can hope to achieve under Israel's military occupation is a semblance of dignified survival.
But, as Dam Eliz Ahmad, a former Houston resident and now a teacher of business management at al-Najah school says, even survival demands a strong faith and hope for a better tomorrow.
"It is this hope for a future without occupation, without roadblocks and without curfews that gives us strength and keeps us going. Isn't this the secret of Palestinian survival, after all that happened to us?"