Manhattan is an ancient term too. So all the people who live there now are entitled to on the law of return. Right?
All the people that live in Manhattan now are entitled to live there, yes. What would return have to do with it? They're already there, just like the Palestinians. Don't really get what you're driving at!
The palestinians aren't living there. They are living who knows where and insisting on a right of return to Tel Aviv and Haifa and other places they never lived or didnnt exist when they were there.
All of this is irrelevant to the basic point that the Palestinians are not prepared for self governance and a Pali state would make matters worse in the region not better. The PA currently is on the verge of bankruptcy owing to its kleptocracy.