This thesis focuses on the status of Palestinian refugees following final peace negotiations. The major conclusions of the thesis are that basic Palestinian refugee rights are not likely to be honored given the immense imbalance of power between Israel and the PLO; that the Palestinian refugee community will likely become a permanently marginalized outcast group in the Middle East; and that the probable result of this condition will be an increase in Palestinian political violence and terrorism against Israeli, American, and allied Arab interests. This is likely to be achieved through mobilization of former refugees by Islamic fundamentalist groups, capitalizing on the failure of the nationalist peace effort. These conclusions are reached through a close examination of the specific Palestinian refugee question and applying a general model of ethnonationalist collective action to the Palestinian question. The major policy conclusion for the United States is that to protect its own interests in the Middle East and reduce violence, the United States must treat seriously the rights of Palestinian refugees during regional peace negotiations. American and Israeli interests on this key issue are clearly divergent; they should be recognized as such and treated accordingly.