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A comprehensive, just and viable settlement of the tragedy of Palestinian refugees that will enjoy wide support within the Palestinian and the Israeli publics is a sine qua non for a sustainable peace settlement. Most on both sides, however, perceive the issue as an existential zero sum game in which the losing side might have its entire national project in jeopardy. Involving tangible matters such as territorial rights, demographic majority and political control, the notion of Palestinian return also raises fundamental aspects of identity on both sides. A sensible solution will thus have to take on board a host of symbolic elements, including notions of justice, guilt, responsibility, redress and forgiveness. But unlike notions of transitional justice, which tend to privilege symbolic elements at the expense of tangible redress, justice for Palestinian refugees will require concrete interventions that would transform the lives of hundreds of thousands. Informed by these assumptions and sensibilities, this article presents a formula for comprehensive solution of the Palestinian refugees’ problem which includes staggered limited return into Israel proper.