I can’t see descendants of settlers who are en masse being kicked out of their homes and heavily taxed coming together to peacefully build a society with the people whom they ceded their homes to and whom they’re paying those reparations. Can you? How would you go about it without making them so resentful that they either refuse to help rebuild or start attacking the institutions of the new single state?

I see the philosophical balance your solution would bring and it’s what I would want to do if I suddenly found myself a settler/settler’s descendant, but I don’t think enforcing it will lead to lasting peace. Perhaps with an education system that truly integrates children and teaches all of their history, without whitewashing any of it. But I think there’s a very strong cultural attachment in Israel to homeschooling, and don’t know if enforcing public schooling would create further resentment.