The "West Bank" was created from armistice lines in 1949. The other side never recognized that as a border and never signed off on a treaty. So the Arabs' claim to that land is highly dubious. If the various Arab parties vying for control in the West Bank got together and gave Israel recognition, peace and assurance that they would keep attacks under control Israel would gladly cede control and would probably uproot settlements. In 2005 in Gaza Ariel Sharon uprooted all settlements in Gaza and evacuated all of the Jewish population. It didn't end well as we now all know. That's why stopping settlements is currently suicidal or worse.
Either the West Bank is Israeli territory, in which case Israel is, as people have accused it of being, an apartheid state which does not allow the same freedoms to its residents as it does to Jews, or it's an occupied foreign territory that Israel will wind up giving back. In which case its residents have no Israeli citizenship claim. You can't have it both ways. If it's Israeli territory than the Palestinians there have the right to vote in Israeli elections and have political representatives in parliament. Does Israel want to add almost four million more Muslims to its voter rolls? I don't think so.
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