Let’s start with some basic assumptions:

The goal of Israel is to be a secure, democratic and Jewish state.

The current population of Israel is about 8.2 (World Population Review) of which 6 million (73%) are Jewish.

The current population of the West Bank and Gaza is about 4 million (cia.gov) of which over 90% are Muslim.

Now, the options:

Option 1 – Continue with present policies, which are to occupy the West Bank and expand settlements and to control Gaza.  This path will lead to continued tension and likely, further violence.  Hardly secure.

Option 2 – Annex the West Bank and Gaza into Israel.

Option 2 a – Give the Palestinians full Israeli citizenship will all it rights. This gives non-Jews almost 40% of the voting power.  Hardly a Jewish state

Option 2 a– Do not give the Palestinians full Israeli citizenship will all it rights.  This results in an apartheid state with two classes of citizenship.  Hardly democratic.

Option 3 – Grant independence to the West Bank and Gaza.  Without reliable partners and a strong Palestinian government, this is hardly secure.

This is an over simplification of the current situation, but points to the serious political and security challenges that lay ahead for Israel.  This does not include a similarly complex situation for the Palestinians.