Adalah, "The Legal Center for Arab Minority Rights in Israel", states that only 3 to 3.5% of the land within Israel (not the occupied territories taken in 1967) is owned by Arabs today, whereas in 1948, 48% of the same land was held by Arabs. Adalah has come out with an interactive map showing how land was appropriated by Israel in the early years of that state; two Israeli laws making it possible.
The Absentees' Property Law of 1950 confiscated all the land owned, possessed or used by the Arab refugees.
The Land Acquisition Law of 1953 confiscated 1.2 to 1.3 million dunams (a dunam is 1/4 acre) taken from 349 towns and villages.
The interactive map breaks down the area into districts which, when clicked, will expand to show the towns and villages affected. Take a look.
"The Story of Israel", which I put in quotes to indicate it is propaganda that Israel wishes the world to believe and which most Americans have swallowed whole, would have us think that the land was largely empty and undeveloped, waiting for Zionists to take up residence and ownership to the detriment of no one. The actual history tells us that the land was taken by any and all means and is still being taken from the indigenous people who live on it. Whether it is Israel "proper" or "within the Green Line" or in the "Occupied Territories" the process is essentially the same - theft - the only difference being when it was done and the specific tactics used to achieve it.
One vividly documented example is available at my posting on Canada Park. I strongly urge you to view the 1991 Canadian Broadcasting Company video there or directly on Google Video.