Now, remember - you are running Israel. And, most people on the right agree with you that there should just be one land, one humanity.
But, the folks in the camps - they don't want to surrender and accept citizenship to your "one land, one humanity" country.
Answering more to the spirit of the question: I believe that the situation between Israel and Palestinians is broken and can't be fixed until something unexpected happens. Neither side has an acceptable way forward.
As a rule of thumb, people who talk about right and wrong don't want peace. Those concepts are far more useful for justifying wars than ending them. Peace is achieved by compromises that make both parties lose interest in the war. There was a genuine desire for peace in the 90s, but it failed, because nobody could find an acceptable compromise. The leaders of both parties realized that the sacrifices required to make the compromise acceptable to the other side were worse than status quo.
Or do something else, I don't care; at this point one has to try anything but this slow-motion ethnic cleansing and "two states" bantustans.
There are Arabs who are full citizens of Israel, who have elected representatives in the Israeli parliament. There are also Arab judges in the Israeli supreme court. Oh, and the population of the muslim Arab citizens of Israel is much greater now than when Israel was formed. So, no ethnic cleansing there.
The Arab population in the Palestinian areas has also multiplied. So, no ethnic cleansing there either.
Israel is good at many things but it seems to be really bad at ethnic cleansing.
But they don't live in the occupied territories, duh. They are also second-class citizens de-facto, with a constant need to go through the courts to do everything they are technically entitled to but denied in practice. They are a fifth of the population but don't express anything near a fifth of the ruling classes - to pick the example you chose, 1 out of 15 supreme court judges is Arab.
It's very much like the condition of black people in the "separated but equal" era in the US, when theoretical legal equality was simply denied in the field.
> the population of the muslim Arab citizens of Israel is much greater now than when Israel was formed.
And this is the source of much public anguish in Israeli public discourse.
> The Arab population in the Palestinian areas has also multiplied.
But their land keeps shrinking. The land claimed by settlements is cleansed indeed.
> it seems to be really bad at ethnic cleansing.
Attempted murder is still a crime.