The resolution, simply summarized, calls for "withdrawal of Israeli armed forces from territories occupied in the recent conflict" (the Six Day War); insists upon the termination of all states of war in the area; guarantees the sovereignty, territorial integrity and independence of all Middle Eastern nations; and calls for a "just settlement" of the question of the refugees.
Both Israel and her neighbors accept the legitimacy of 242, although the two sides interpret the resolution to mean quite different things. For instance, the official Israeli position notes that the text of 242 deliberately excludes the definite article "the", referring to "territories occupied" rather than "the territories occupied." According to the legal principle "expressio unis et exclusio alterus" (which states that the terms excluded from a law are excluded intentionally, and the interpretation of that law should be accordingly altered), they argue, this gives Israel the legal right to permanently retain some portions of the West Bank which would be indispensable to Israel's security. The Arab position is that this is an unacceptable interpretation of the text; furthermore, they note that the definite article "the" does in fact appear in both the official French and the official Arabic text of the resolution.
The two sides also disagree over the implementation of the resolution. Israel generally focuses on the latter part of the resolution first, which calls for the "termination of all states of belligerency" in the area. Thus, the refusal of the Arab states to end the state of war that exists represents a material and continuing breach of 242, making Israeli security control of the occupied territories a continuing necessity. The Arab states, however -- especially more radical regimes such as Syria -- have always maintained that full Israeli compliance with 242 is an indispensable prerequisite to any negotiations, and refuse to consider official negotiations with Israel until it complies (many of these regimes, of course, have engaged and continue to engage in unofficial "closed door" negotiations with Israel outside of public scrutiny). This continued disagreement continues to be reflected even in Israel's peaceful relations with more "moderate" neighbors such as Egypt and Jordan, and is still a major stumbling block in negotiations between Israel and the Palestinians -- the former insisting upon an end to terrorism as a prerequisite to negotiations, the latter claiming Israel's continuing violations of 242 as one of the justifications for their armed resistance to the occupation.
Perhaps the most widely disputed element of 242 is the call for "a just settlement of the refugee problem." Israel continues to refuse to consider any large-scale resettlement of Palestinian refugees on Israeli territory, claiming that such a move would undermine the Jewish character of the state of Israel and lead to its collapse. Moreover, Israel points to the continued refusal of the Arab nations to compensate Israeli Jews of Arab origin, many of whom were driven out of their home countries after facing the expropriation of virtually all of their property. Israel's official stand at present is that refugees will be resettled either where they currently live, or in a newly constituted Palestinian state at such a time when it is established. Recent evidence suggests that a moderate Palestinian leadership would accept a "symbolic right of return" to Israel in the framework of an overall peace agreement, along with an acknowledgement from Israel of its responsibility for the Palestinian refugee problem. However, numerous Palestinian groups with substantial political power have stated their opposition to any agreement that does not allow for a full return of Palestinian refugees to their places of origin within the former Palestine Mandate, regardless of whether those places are currently in Israel proper. This argument reflects an even older conflict over the meaning of UN Resolution 181, the first UN resolution to deal with the Palestinian refugees. The refugee issue continues to be one of the most intractable facets of the Arab-Israeli conflict, and continues to hamstring efforts on both sides to implement Resolution 242.