IMHO, the Israelis ought to ANNEX the Golan Heights, by right of conquest.
The only thing on the table for Syria should be "If you stop funding and arming Hezbollah, we won't go to Damascus and kill everyone we find there."
Annexation-by-conquest is not recognized as valid any more, by international law. Indeed, such law is why we kicked Saddam out of Kuwait.
-Eric