What makes sense now is for the UN, (the entity that took land from Arabs and gave it to Jews to remedy some of the problems cause by the Germans), to invoke something like the legal Doctrine of Eminent Domain and award Just Compensation in exchange for a Release of Claims to those who lost property. At the same time we need to draw some sensible borders enabling the Palestinians to establish a state, if that is their choice. Set up a Middle East Compensation Commission where people who lost property as a result of its creation of Israel, Arabs and Jews alike, can come, present their claims, sign a Release and walk away with a check. That would be fair. Isn't it better to justly compensate people than fight for another 63 years? Wars and oil embargoes also cost money. Plus, no more bloodshed. As far as the Jewish settlers go, they should be permitted to stay where they are. If they find themselves in Palestine they'll be Palestinian citizens. Jewish Palestinians. Israel has Arabs. Palestine can have Jews. It's the same thing. No artificial borders for them. The fact is, once the settlers come to grips with this, most of them will leave voluntarily. If some zealots chose to stay and become citizens of Palestine let them. Finally, if in Israel there is land that can be reasonably retaken by formerly displaced occupants then, instead of monetary compensation, it would be restored to them. If they take it back they get to live there or sell it or use it in some reasonable way as per their choice.
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