I believe that Palestinians should be given back lands taken from them by Zionist. Not sure if they should recuperate all their lands prior to the UNs resolution that passed in 1947 though. On the other hand I don't see why Jews shouldn't have a right to live in any of the disputed lands.
The whole situation is just fucked. No matter what you do you'll always end up with bloodshed. If you remove the Jews and Zionists from Israel then you'll only have Jewish terrorists attacking Arabs and vice versa if you removed Palestine and Arabs from their territories, which is evident due to the many guerilla attacks upon Jewish bases of military of political power, sometimes even attacking civilians.
Personally, I think most Jews in the region that are promoting the Torah and divine claim that God gave them those lands should re-read their holy scriptures. They have no claims to the lands until their Messiah shows up. But then again, and I hate to sound xenophobic or uncouth but the Extremist Muslims groups need to get out of their midieval thinking and accept some sort of Jewish prescence in the area.