The U.S. agreed to resettle 1,350 Palestinians displaced by fighting in Iraq, marking the largest resettlement ever of Palestinian refugees in the nation.

The decision appears to signal a shift in Washington's previous position against resettling Palestinians out of concern about the potential impact on U.S. relations with Israel and the Arab world. The resettlement, which is slated to begin this fall, is likely to illicit strong reactions from people on both sides of the Israeli-Palestinian conflict.

A State Department spokesman said the U.S. is responding to an appeal from the United Nations' refugee agency, UNHCR, which has been providing assistance to some 3,000 Palestinians stuck in three makeshift camps in the desert in the Syrian-Iraqi border region.

Middle Eastern scholars and refugee experts believe Washington felt pressured to help solve the humanitarian crisis created by the U.S.-led invasion. Some of the Palestinians have lived in the camps for more than three years.

"These particular Palestinians are a fallout from the Iraq War," said George Bisharat, a professor at the University of California Hastings College of Law, who specializes in Middle Eastern law. "The Obama administration had to take some responsibility for the consequences of the invasion."

However, resettling such a large number of Palestinians in the U.S. is a potentially volatile issue.

Many Arab countries interpreted President Barack Obama's speech in Cairo last month as an attempt to put U.S. relations with Islamic nations on a new course and dissipate the strain that characterized ties during the Bush administration. They see the offer of accepting Palestinian refugees as an early sign of a new openness.

Meanwhile, some supporters of Israel are concerned that the resettlement might alter the U.S.'s approach toward Israel.

Ziad Asali, president of the American Task Force on Palestine, a Washington advocacy group, applauded the U.S. decision, calling it "a significant step ... consistent with the new U.S. message of accommodation and finding solutions with the Muslim world."

However, Mr. Asali cautioned that it is bound to irk Palestinian and Arab leaders who interpret U.S. willingness to resettle Palestinians -- which comes with full rights such as citizenship down the road -- as "a conspiracy to liquidate the Palestinian refugee issue." With the exception of Jordan, no country in the Middle East has granted citizenship to Palestinian refugees. Many Arab countries believe that fully integrating large numbers of Palestinian refugees would undercut their demand for an independent state.

At least one pro-Israel group in the U.S. deems it a mistake to absorb the Palestinian Iraqis, who were welcomed by Saddam Hussein and regarded as loyal supporters of his regime. "We don't think that Washington should be bringing in a group of people who we know were publicly and consistently hostile to the United States and its closest ally, Israel," said Morton Klein, president of the Zionist Organization of America.

An Israeli government spokesman said that "Israel has no official position on this internal American issue."

Like other refugees, the Palestinians will be resettled across the U.S., based on where resettlement agencies partnering with the U.S. government decide housing and job opportunities are available. Refugees who have relatives in the U.S. are likely to be settled near their families.

Palestinians moved to Iraq after Arab-Israeli conflicts in 1948 and 1967, and following the Gulf War in 1991. The community grew to nearly 35,000. "Saddam Hussein made a point of using Palestinian refugees to show solidarity with the Palestinian cause," said Bill Frelick, refugee-policy director at Human Rights Watch in Washington.

The preferential treatment bred resentment among many Iraqis. After Baghdad fell to U.S.-led forces in 2003, Palestinians became a target for harassment and violence, including bombings and murder. A particular point of contention had been the government's provision of subsidized housing for Palestinians, often at the expense of mostly Shiite landlords who received little rent from the government in return.

After Mr. Hussein was deposed, many landlords evicted their Palestinian tenants, who are mainly Sunni Muslims. Driven out of Baghdad and other cities, the Palestinians tried to flee to neighboring Syria and Jordan, which already host hundreds of thousands of Palestinian refugees. When those countries blocked their entry, the displaced Palestinians sought refuge in camps that lack basic infrastructure and jeopardize their health and safety, said Mr. Frelick.

In October, the UNHCR issued an appeal to countries traditionally open to resettlement for urgent action after fruitless calls for help from humanitarian organizations. "It is priority that all these camps close by the end of the year because conditions are not sustainable," said Tim Irwin, a UNHCR spokesman in Washington.

The U.S. committed to absorb the largest number of Iraqi Palestinians. Sweden, the Netherlands and the U.K. also joined the effort, he said. So far, 24 Palestinian refugees have been resettled in the U.S. The remainder are expected to arrive by early 2010.