Something like this might be Israel/Likud's longterm strategy. They, like Hamas, maintain a state of perpetual conflict, supporting settlement incursions into the West Bank (with talk of annexing portions), strangling Gaza with the pretext of Hamas missile launches.

Incorporating Palestinian Arabs into Israel proper is problematic because it raises the specter of Jews becoming yet again another minority in their own homes. And if the Palestinians are to emigrate ... to where? Not Jordan—given that its first king, Abdullah I was assassinated by a Palestinian. Egypt? Doubtful. Syria? Who'd want to live there? Lebanon? They tried that. Got kicked out.

Given my druthers I'd initiate a two-state solution: Marshal Plan-style support to jumpstart the economies of Gaza & the West Bank, compensation for lands taken by Israel, & one year for West Bank settlers to either repatriate to Israel or accustom themselves to becoming Palestinian citizens with Palestinian passports. Let them know Israel will intervene in the case of a pogrom, but otherwise they're on their own.

If God wants them to live in Judea &/or Samaria then He's not going to care what government collects their tax payments. When Mosiach comes he'll straighten all of that out. Till then, however....