With regard to the refugee question, both sides agree that the solution will be based on UN resolutions 194 and 242 and on the Arab peace initiative. The refugees will be given five choices for permanent residency. These are: the Palestinian state and the Israeli areas transferred to the Palestinian state in the territorial exchange mentioned above; no restrictions would be imposed on refugee return to these two areas. Residency in the other three areas (in host countries, third countries, and Israel) would be subject to the decision of the states in those areas. The number of refugees returning to Israel will be based on the average number of refugees admitted to third countries like Australia, Canada, Europe, and others. All refugees will be entitled to compensation for their "refugeehood" and loss of properties.