israel does, in fact, exist on some occupied land that she should return, including many west bank settlements. however, there is something to be said for keeping parts as a bargaining chip against those motivated largely by religious and nationalistic fervor mixed with some basic hatred. other parts of her land were obtained legitimately, going all the way back to the first aliyah after the kiev pogroms in which tens of thousands of jews were massacred. many immigrated legally, though the ottoman empire later threw up some barriers to immigration with hopes to limit their numbers. many were later moved legitimately under the authority of the british in mandatory palestine.
legal immigrants are not necessarily "occupiers". there is also a period past which land becomes naturalized, just like most of the world has been taken and settled by force at some point or another. most of the people who are descendants of those ancient conquerors are just as indigenous as those who were there before. i'd venture to say much of israel, while it ought to be shared better, is populated with naturalized inhabitants.
Characteristics of apartheid can exist even if it is not at the severity experienced by black south Africans. The analogy here has utility, and racism towards Palestinians is unfortunately a huge problem in Israeli society.