If only the situation were even that "good" for Palestine. It's been an occupied territory by Isreal for years - long before last Oct. There already are "border fences" - Gaza has been under blockade by Isreal for at least 2 decades, restricting any movement of Palestinians. I recommend having a look at a map to see just how dire the situation is for Palestine when they have Isreal right in the middle and all around simultaneously.

Palestine isn't even recognized as a country by several, including - conveniently - Isreal and the US.

So, neither of those proposed alternatives would really be a good argument to Israel I'm afraid.