Sage advice from the Rabbi of the settlement of Beit El (of Ulpana infamy), R' Shlomo Aviner:
Q: What should we do with settlements established on Arab property?A: First of all, these Arabs must bring proof that it belongs to them. If it turns out that it was a gift of the King of Jordan, they have to being proof that the property belonged to the King of Jordan, who could then give it away. If they indeed prove that it belongs to them, we should compensate them, as Maran [our master] Ha-Rav Kook wrote in a letter to the JNF.
If I had a nickel for every time an Palestinian was paid under those terms, I wouldn't have any nickels.