BAQAA CAMP, Jordan, Aug 15 (Reuters) –
For Palestinian refugee Hilmi Aqel Israel's evacuation of Jewish settlements in Gaza has revived dreams that his people will one day return to their former homes in
what is now Israel.

"For the first time in 50 years I now feel there is hope that the
Palestinian people will one day be free," said 33-year-old Aqel, one
of around 1.8 million Palestinian refugees living in neighbouring
Jordan.

"It has raised hopes that the time will come when the occupation of
Palestine will end."

Amid the poverty and hopelessness of the squalid camps they inhabit,
even young Palestinians who have never set foot in the holy land
yearn one day to return. Many keep the keys to family homes their
parents and grandparents left behind after the creation of Israel in
1948.

Israel's plans to end a 38-year occupation of Gaza, which it captured
along with the West Bank during the 1967 Middle East war, sparked
jubilation among many of the 4 million Palestinian refugees scattered
in Arab countries.

Chanting "Today Gaza and tomorrow Jerusalem", scores of Palestinian
refugees took to the streets of Lebanon's largest camp, Ain
al-Hilweh, on Monday to celebrate.

Brandishing rifles in the air and performing the traditional dabke
dance, they hailed the evacuation as a step toward their eventual
return to their homes in what is now Israel.

"O God, the withdrawal gives me hope the Israelis may withdraw from
the rest of the Palestinian lands and of our return back to our
original homes," said Yasseen Ibrahim, a baker in the crowded camp on
the outskirts of Amman.

Amer Saleem, a teacher in the same camp, said: "Palestine is our land
and it's our homeland which Israel has to leave sooner or later."

PALESTINIAN VICTORY?

For many of the inhabitants living in makeshift homes with corrugated
iron roofs, the sight of Israeli civilians leaving settlements the
World Court has judged illegal, inspired feelings of nationalist
pride and defiance.

Some said the pullout was a victory for militant groups led by Hamas,
which waged armed attacks against Israeli civilians.

"It is the Israeli blood that was shed that forced (Israeli Prime
Minister Ariel) Sharon to retreat and the more the resistance grows
the more Israelis will leave our occupied land," said Khaled Abu
Natour, a grocer in Jordan's Baqaa camp.

Others are less optimistic. They say a long and bitter conflict lies
ahead and fear Israel will give up Gaza but consolidate its hold on
the West Bank to prevent the emergence of a viable Palestinian state.

"I believe the withdrawal leaves no more than a prison for the people
of Gaza because they have no borders or airport," said Sheikh Ahmad
Abu Sadad, living in the Jordan's Jerash camp.

Refugees also have their own concerns. They fear any future peace
settlement will forego any right of return for millions of
Palestinian refugees to land now inside Israel. They also fear
exclusion from a future Palestinian state.

"I am happy they are leaving, but I will dance in the street only
when Jerusalem is back to us and we are back to it," said Um Nidal, a
mother of 12 living in a camp near Damascus.

"I am willing to give all my sons to the resistance to make this
happen." (Additional reporting by Ali Hashisho in southern Lebanon
and Inal Ersan in Damascus)