Yeah that is part of the threat. Absurd in its own way “We will declare ourselves a state but then dismantle our government and become full-time terrorists again”. They will be Somalia.
Or we can just annex the former PA territory and offer citizenship to any Arab with a clean record who applies and takes an oath of loyalty. Few will at first, but as law and order makes their lives easier, and the pre-Intifada prosperity seeps back into the region, enough will that we can say they are enfranchised, and enough will refuse for “Arab pride” that they won’t be changing the electoral balance any time soon. Any emigrants will have their move to the country of their choice subsidized along the lines of Jewish immigration subsidies.