You only suggest carrying out the final step of Israel's ethnic cleansing.
So, in your view, treating Palestinian refugees like human beings, providing them with a way to make a living, integrating them into society, that's ethnic cleansing.
Give your head a shake.
What is being done to them right now by Arabs is abominable. They're not treated like human beings, they're treated like animals. Why? Because those Arabs hate Jews so intensely that they don't care whether or not they fuck the Palestinians over completely, so long as it serves the greater ends of their hatred.
As for what could be done-- it's a pretty tricky problem, but I think some sort of collective negotiation involving the property stolen from Jews by Arabs, and from Palestinians by Jews, collectively if you put it all in the pot, you could probably work out a deal that makes everyone happy, so that everyone gets something of equal value to what was taken from them. Assuming everyone is WILLING to be made happy, that is.