If you assimilate you face the demographic problem.In the case of the West Bank locals will either assimilate with Israeli citizenship, move to Gaza or move out, whether to Lebanon, West Africa, or a Western Nation where they have an in via family. Frankie is always posting his little maps showing the shrinking of it. Every year more settlers move in. It's why Israel cuts the Orthodox Jews so much slack. They have big families to draw on.
Once that area is completed the next will be Gaza. A lot will depend on the outcome of this war but I see a new security line at least maybe 5-10 Miles deep into Northern Gaza annexed by Israel at the least. In the long run? Man too many players and variables but you could end up with a scenario similar with what happened to the Tamil Tigers.
They are pawns being used to try to keep the West from getting full deals with Sunni Muslim Govts. The Palestinians have systematically lost allies due to their Shia terror ties and support of attempts at coups on Jordan and Egypt, and the invasion of Kuwaut. Nobody in the region wants them now, nor want to help them. They are playing the neutral game for now and letting Israel do their thing to placate the Arab in the Street.
But this is really just a stop. The larger fish is Iran. Both the West and Sunnis want it gone. They need to isolate them. Hence letting the Palestinians lose, Lebanon lose, Syria lose. It's what Afghanistan was partially about as well.
With the final game being Russia and it's resources.
Palestinians outnumber Jews and if you give them the vote....
Its Israel's biggest fear.