Mahmoud Abbas touched off a storm of debate in the Middle East over the weekend after the Palestinian president seemingly conceded the "right of return" for Palestinian refugees, a symbolically loaded issue at the heart of the Israeli-Palestinian conflict for decades.

In an interview with Israel’s Channel 2 news, Mr. Abbas said that although he is a refugee hailing from the Israeli town of Safed, he plans to remain in the West Bank rather than lay claim to his boyhood home as part of a peace deal.

"It's my right to see it, but not to live there," he said in English in a one-on-one interview. "I am a refugee, but I am living in Ramallah, and this is Palestine. I believe the West Bank and Gaza is Palestine, and the other parts are Israel."

Both Israeli and Palestinian observers saw the remark as breaking with a demand that refugees be allowed back into homes from before the 1948 founding of the Jewish state – an issue negotiators have tried to resolve behind closed doors but never has been discussed in the open among the Palestinians because it is a taboo.

Within a day after the Friday broadcast of the interview, Palestinians in Gaza – controlled by rival faction Hamas – burned posters of Mr. Abbas which were labeled as "traitor," and Mr. Abbas was forced to do damage control by telling Arabic language newspapers that he had only spoken on a personal level and there had been no change in the Palestinian position.

"What he said in the interview that was so hugely important to Palestinians was that 'I don’t have a right to return to my home.' If you were to take that literally, then that would mean that he is waiving the right of return entirely and there would be no negotiations," says Nathan Thrall, a Middle East expert for the International Crisis Group who focuses on the Palestinians. "It's the center of the entire conflict in the Palestinian view."

Though Mr. Abbas’s seeming concession is viewed as slip of the tongue, many also say it is a rare public acknowledgement that he will compromise on such a difficult issue. Indeed, in negotiations that took place in 2008, the Palestinians requested a right of return for 15,000 refugees a year to Israel over 10 years, according to the International Crisis Group. In 2001, negotiators discussed giving Palestinians monetary compensation and the option to refugees abroad of moving to the Palestinian state in the West Bank and Gaza.

Israeli doves cited it as proof that Abbas is Israel’s best hope to negotiate an accord, contrasting it with his portrayal by Israel's government as a leader who prefers to insist on preconditions rather than negotiate. But as Israelis gear up for January Parliamentary elections, the moribund talks with the Palestinians have been overshadowed this year by Iran and a debate over Israel's economy. Some accused Abbas of meddling in the election with his remarks.

"It's a recognition that in negotiations that the Palestinians aren’t going to get the right of return, and it's maybe the first Palestinian that is standing up and being honest with his people," says Gershon Baskin, an Israeli political analyst. "Palestinians have to understand that they have been lied to about the right of return."

Palestinians wear keys to symbolize ownership to property left behind during the 1948 war that gave birth to the Jewish state and displaced hundreds of thousands of Arabs. For them, the right of return is sacrosanct acknowledgement of decades of displacement and injustice. Israeli Jews, however, see the right of return demand as threatening a massive influx of refugees – tantamount to refusing to recognize Israel’s character as a Jewish state. Many Israeli critics of the Palestinian president have alleged in the past that his refusal to concede on the right of return indicates that he is not serious about making the concessions necessary for a deal.

But Ghassan Khatib, a professor at Bir Zeit University and a former spokesman for the Palestinian government, says that the sides have discussed a solution to the right of return by granting the Palestinians several forms of compensation that would ultimately limit the number of refugees repatriated to Israel proper.

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Mr. Abbas' mistake is that he conceded the principal without any quid pro quo – before the start of negotiations.

"Giving up the right of return, or any indication in that direction is provocative," he says. "It's an unwelcome gesture."