In 1947, the United Nations proposed a division of the British Mandate into a Jewish state alongside an Arab state. Jewish leaders accepted, but Arab leaders said no and launched a war to destroy the Jewish state. This decision was immensely tragic for both sides, as it led to 472,000 to 750,000 Palestinian Arabs and over 850,000 Jews from Arab states becoming refugees. Today, the UN claims that over 5 million Palestinian refugees live in the West Bank, Gaza, Syria, Lebanon, and Jordan.
“The Arab armies entered Palestine to protect the Palestinians…but instead they abandoned them, forced them to emigrate… and threw them into prisons.”
-- Palestinian President Mahmoud Abbas, 1976
Arab and Palestinian leaders were primarily responsible for the Palestinian refugee crisis.
According to historian Benny Morris, “responsibility is split among [Israel], the Palestinians and the Arab countries – with enormous responsibility lying with the Palestinians who started the conflict.”
Palestinian refugees fled for several reasons:
Most left to escape the fighting. Elites went first, causing others to flee as civil society collapsed.
Arab leaders encouraged them to get out of the way of advancing Arab armies, promising they would return after a victory that never came.
Arab propaganda manufactured or exaggerated tales of Israeli atrocities, causing widespread panic.
Israeli troops removed a small minority, mostly from strategic areas vital to the country’s survival.
Arab and Palestinian leaders caused the long-term displacement and suffering of Palestinian refugees.
Arab states refused to absorb the refugees, give them citizenship (except for Jordan), or grant them equal rights and opportunities. Instead, they used Palestinians as pawns in their continuing war against Israel. 
Israel has no Palestinian refugees. It offered Arabs in its territory citizenship and 160,000 accepted. They became Israeli citizens with equal rights1.
The UN perpetuates this crisis through its Relief and Works Agency for Palestine Refugees (UNRWA)
UNRWA allows Palestinians to pass refugee status to their descendants endlessly, inflating their numbers.
If the international criteria used for all other refugees were applied, there would be far fewer Palestinian refugees today.
More Jews than Palestinians became refugees as a result of the 1948 War.
Almost 10,000 Jews were ethnically cleansed from the areas of the Palestine Mandate where Arab forces prevailed.
After the war, over 850,000 Jews fled rising persecution or were forcibly expelled from Arab and Muslim lands. Most were resettled in Israel, where they became the majority of the country’s Jewish population.
 JTA, “Jewish refugees bill being considered by U.S. House of Representatives,” Haaretz, August 2, 2012, at http://www.haaretz.com/jewish-world/jewish-world-news/jewish-refugees-bill-being-considered-by-u-s-house-of-representatives-1.455503; Benny Morris, Righteous Victims, 2001 pp. 252-258; Yoav Gelber, Palestine 1948, 2001 pp. 74-84
 Benny Morris, Righteous Victims, 2001 pp. 252-258; Yoav Gelber, Palestine 1948, 2001 pp. 74-84; Howard Sachar, A History of Israel, 2000, pp. 395-405
 Mitchell Bard, “The Palestinian Refugees,” Jewish Virtual Library, May 6, 2013, at http://www.jewishvirtuallibrary.org/jsource/History/refugees.html
1 Bard, Michael. "Israeli Arabs: Status of Arabs in Israel." Jewish Virtual Library. March 2016. Israeli Arabs: Status of Arabs in Israel.
2"Palestine refugees." UNRWA. https://www.unrwa.org/palestine-refugees.
3"Jordan." UNRWA. https://www.unrwa.org/where-we-work/jordan.
4 "Lebanon." UNRWA. https://www.unrwa.org/where-we-work/lebanon.
5"West Bank." UNRWA. https://www.unrwa.org/where-we-work/west-bank
 Anita Shapira, “The Past is not a Foreign Country,” New Republic, November 29, 1999.
 Howard Sachar, A History of Israel, 2000, pp. 395-405