1st paragraph: Yes Israel runs a brutal and criminal occupation. It is far from the only such government in the world, indeed there are several which are far worse human rights abusers. If we're to go beyond simple verbal condemnations than you need to explain why specifically Israel should be so targeted - as opposed to say China, Russia, North Korea, India...

My answer would be that it is because of the incredibly destabilizing effect of the Israeli-Palestinian conflict. But that only makes sense if the objective is to seek a resolution. And that brings me to the second paragraph about the Israeli consensus against a Palestinian right of return. Insisting on such a right is the equivalent of saying that there will be no peace for the forseeable future since an overwhelming majority of Israelis sees it as tantamount to the destruction of their country.  You could counter by saying the same applies in reverse to the Palestinians. I don't think that is the case, but if it is then there is no real hope for settling the conflict and international efforts should be limited to just keeping it at as low a level as possible.  Forcing Israel to accept a right of return strikes as absolutely insane - seeking the destruction of a nuclear armed, conventionally powerful state, smack in the middle of an important and volatile region is not exactly a recipe for world stability.  I'll also note that its been almost forty years since the UN Security Council abandoned its insistence on a right of return - switching to a conveniently vague demand for a 'just solution' to the refugee problem.

In the case of Germany I agree with you on one point - the expulsions took place in the immediate aftermath of Germany's crimes during WWII. Germans only began seeing it in that light in the sixties. In the first ten-fifteen years of the Bundesrepublik the Germans themselves were presented as the primary victims of the war. The interstate agreement (i.e. the Potsdam declaration) was made by the victorious great powers, Germany wasn't involved, nor was Poland a party to the agreement shifting its borders, though the ethnic cleansing of Germans did have the support of virtually all Poles. West Germany's constantly repeated official policy (repeated both verbally and in German law) was that the 1937 borders remained valid, that expellees retained ownership over all property in the Vertreibungsgebiete, that the compensation they received in the Lastenausgleich did not change that one bit, that the Poles in the former German lands were illegal squatters. With respect to the Sudetenland the policy was that Munich was not valid but that the expulsion was illegal and that the Sudeten Germans had a right to exercize their Selbstbestimmungsrecht - i.e. to vote to join Germany. The expellee movement rejected the idea that the Poles or Czechs had any claims on private property, using the analogy that no matter how long a thief keeps posession of his stolen goods, and even if they pass on to his children, they remain the property of the rightful owner and his heirs.  It was only in 1991 that Germany accepted the Potsdam borders de jure (1970 was only de facto since the constitutional court ruled that West Germany couldn't give de jure recognition to the postwar borders)

And no, I don't think Israel should offer compensation to the refugees, and if it should, then think for a second just what the proportionate compensation should be for a relatively bloodless (Kosovo level) ethnic cleansing, vs what Israel would deserve from Germany, or indeed other nations complicit in one degree or another in the Holocaust. Or what the Armenians should get from the Turks, or pretty much every nation of the former (and in the case of the Caucasus - current) Russian colonial empire.

The hellish mess of the Israeli-Palestinian conflict is in large part the direct result of the attitudes and actions of European societies. Israel should withdraw to borders based on the 1967 status quo ante with one-for one compensation for any (minor) adjustments, but that's it. Paying for the monetary cost of making the agreement work should be the rest of the world's problem, and particularly that of Europe.