Yasir Arafat was speaking as thousands of Palestinians marched on Saturday to mark the "Nakba", or catastrophe, of Israel's creation in 1948.
In a televised address, Arafat said Israel could not turn a blind eye to the suffering caused when it came into being.
"Israel cannot ignore its moral and political responsibility for this national tragedy which has hurt the Palestinian refugees," he said.
"The Palestinian refugees' right of return is a holy right confirmed by international law. It is not right that anybody in the world deny the right of the refugees to return to their homes."
Right of return
Thousands of Palestinians took to the streets across the West Bank and the Gaza Strip to mark the day, waving flags and carrying large keys in memory of the Nakba.
In the West Bank city of Ram Allah, more than 2500 people flocked to the centre, waving flags and chanting "No peace, no stability without the right of return".
"Israel cannot ignore its moral and political responsibility for this national tragedy which has hurt the Palestinian refugees. The Palestinian refugees' right of return is a holy right confirmed by international law"
Hundreds of children held up placards bearing the names of Palestinian villages, now inside Israel, from which their families originated before the crowd held a moment's silence in memory of the events of 1948.
In the northern city of Nablus, about 5000 demonstrators burned a cardboard model of an Israeli tank, along with life-sized effigies of Israeli Prime Minister Ariel Sharon, US President George Bush and British Prime Minister Tony Blair.
"We say 'no' to all projects that deny the right of return," they shouted, referring to Bush's endorsement of an Israeli plan to withdraw from Gaza.
The plan also saw the US leader effectively ruling out the Palestinians' right to return to land that was theirs before 1948.
Israeli PM Sharon plans to deny
the Palestinians right of return
Another 3000 demonstrators gathered in the northern city of Qalqilya and a similar number was reported to be gathering in Tulkaram, Palestinian security officials said.
In the southern West Bank, nearly 1000 demonstrators gathered in Bethlehem and another 200 were seen in central Hebron, shouting and waving flags.
And in Gaza, about 10,000 demonstrators flocked to the Palestinian Legislative Council headquarters, waving pictures of Arafat and holding up ageing keys of what used to be their homes before Israel was created.
"We will return to our land," they shouted.
Across the Middle East
Palestinians across the Middle East also marked the occasion. In Lebanon's largest refugee camp, Ain al-Hilwa, some 10,000 Palestinians marched through the narrow alleys chanting "Death to Israel, Death to America!"
In Jordan, about 1000 political advocates called on the Jordanian government to expel Israeli diplomats and cut relations with Israel.
"We call upon the government to end
all kinds of dealing
with the Zionist enemy and hosting Israeli officials and citizens
in our country"
one of the demonstrators
The Muslim Brotherhood Movement, Jordan's largest opposition group, and 14 smaller political groups organised a peaceful one-kilometre (0.6 miles) march to the United Nations building in the west of Amman.
"We call upon the government to end all kinds of dealing with the Zionist enemy and hosting Israeli officials and citizens in our country," Hamzah Mansur, one of the demonstrators, said in a brief speech.
In Damascus, Syria, some 100 Syrians and Palestinians protested al- Nakba with a sit-in outside the offices of the European Union Commission.
Hundreds of thousands of Palestinians were forced to flee their homes when Jewish forces invaded their land just before the creation of Israel in 1948.
Those who stayed in their villages in the face of massacres and threats are now described as Israeli Arabs, but the majority became refugees in the West Bank, Gaza Strip and neighbouring Arab countries.
It is estimated there are more than four million Palestinian refugees in the world.
Most of them live in appalling conditions in refugee camps throughout the Middle East, while the Israelis who are now living in their homes enjoy first-world standards of living.
The Jews who stole their land claimed Israel was the birthplace of the Jewish people and that they had reclaimed their birthright after 2000 years of forced exile.
Israelis are overwhelmingly against a mass right of return because they fear it would result in a Palestinian majority in Israel.