Israel should simply annex the "Occupied Territories", initially won in defending their home turf against aggressors. This would achieve more defensible borders and sufficient living space to sustain their population. Any Israeli Arabs who are suspected of sympathy for the Palestinians, or otherwise want to leave, would be "encouraged" to do so.
Post haste.
Then, call the whole affair "over". Unless somebody wants to make something of it...
Of course, they should have done this years ago. They are paying now for having been forbearing earlier. But, I agree, better late than never. I don't think they will, though. They don't seem to be able to generate a national consensus to go just against world opinion and annex the territories and be done with it.