"Propaganda says Abu Mazen wants to flood Israel with five million refugees to destroy the state of Israel," he told the group at his Muqataa presidential compound in Ramallah, referring to himself by his nickname.
"All we said is that we should put the refugee file on the (negotiating) table because it is an issue we must solve to end the conflict," he told them, adding that any solution must be "just and agreed upon."
Resolving the question of the right of return for Palestinian families who fled or were forced out of their homes during the war which accompanied Israel's independence in 1948 is one of the most bitterly-disputed aspects of the conflict.
The Palestinians have always demanded that the Jewish state recognise their right of return to homes in modern-day Israel in keeping with UN General Assembly Resolution 194.
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But Israel rejects the idea, saying it would erode the country's Jewish majority. It is, however, prepared for the refugees to live in a future Palestinian state.
Prime Minister Benjamin Netanyahu has insisted that the Palestinians recognise Israel as "the state of the Jewish people" in a move to ensure the refugee issue is resolved within the borders of a future Palestinian state.
But the Palestinians have dismissed the demand, saying they recognised Israel in 1993 under the Oslo accords and insisting it is not for other nations to define a state's national or religious character.
The fate of the refugees is one of the core disputes under discussion in US-brokered peace talks relaunched last year that have shown little sign of progress.