Jerusalem were divided and Palestinians were not allowed to move back. (1967?)
Series of Israel laws which rule Palestinian residents - they didn't give legal status. Palestinians are "Permanent Residents" - they can move freely, but have to carry IDs, they can vote only local elections, but not national elections. The status were not transphers to children or families. Each person has to "earn" it.
Israeli's policy : Jews MUST maintain majority demographically.