This is what is likely to happen. Israel will soon sign a peace treaty with the Palestinians to withdraw to the 1967 boarders with Jerusalem as a jointly controlled city. The Palestinians will have an official State. Refugees will be allowed to settle in their state. Terrorism will for the most part be put on hold for just a little while. The next step will be an anti Zionist propaganda campaign and eventually an orchestrated Arab attack planned and executed by the Jihadists to get control of the rest of Israel and end the Israeli state, but unfortunately that will again not succeed, and it'll be back to dismal Palestinian despair.
Until the Arabs can really contemplate an Israeli Jewish Zionist state to exist- they will never have a good future for the Palestinian people.