First, Israel will be a Jewish majority state within the security fence. That ship sailed during Sharon's reign. Palestine's choice is a two state solution with negotiated borders or a two state solution with Israeli chosen borders. As for the Jewish settlers, the moment Palestine's jurisdiction is declared over a territory, the Jewish settlers gain all rights under the UN Universal Declaration of Human Rights and Palestine is stuck with a hostile minority. So what. Lots of country's deal with that. Having a few Jews within their borders doesn't mean a Palestinian state isn't viable. The whole 'annex us, so that we can vote you put of existence' will never happen. Israel will never annex Gaza, so the Palestinian majority one state is very far away. They probably won't annex area A either. The most likely Israeli picked border will be the current security fence.
Palestinian wounded in clashes with Israeli forces two days ago succumbs to wounds (Haaretz)
from the article: Leading Palestinian intellectual: We already have a one-state solution