To preface this, people might consider me both a bit of a judeophile and an antisemite. I find Jewish culture quite interesting, but I see the Jewish people as a morally bankrupt and predatory group that others need to be careful around, though not a boogeyman or "root of all the world's problems" group that needs to be completely erased like many seem to think they are. These arguments aren't meant to be logistical, but an ideal that would likely only ever occur in a fantasy world.
I believe that the state of Israel is a very flawed nation that unnecessarily victimizes Palestinians, Arabs, and even other Jews. It's a mindless system that seems to have a very strong basis on fear of another Holocaust, yet its actions appear to fuel antisemitism and create reasons for people to vouch for another shoah. My opinion is it might be too late for the state of Israel to do what it needs to do to protect itself while also surrendering unnecessary and vile policies. The Israeli government should also protect religious and ethnic minorities (Jewish and other indigenous peoples), as well as recently-arriving Jewish olim who are discriminated against. There are far too many ethnic conflicts between Jewish groups that have yet to be reconciled. I worry that the Jewish people are intrinsically predispositioned towards victimizing others, so a good way to prevent them from doing so would be to weaken them so they are perpetually conscious of the potential consequences of any bold actions they may feel an urge to take. The Israeli government should surrender much of the land it has taken from surrounding nations, such as any political administration of majority Arab areas within Jerusalem, the West Bank, Gaza, Mount Sinai. They should take a stand against Israeli settlements and destroy them by any means necessary, as they did with settlements in Gaza in 2005. It should be up to the people who currently live in these areas legally whether Jews should be welcomed.
The only concern I have with the policy I've proposed is that the Israelis have done so much wrong that they truly do face an existential threat, where even if they did attempt to enact a policy of coexistence with surrounding nations, said nations wouldn't be convinced and would simply destroy Israel. I sympathize with this concern, but I honestly couldn't blame the Arabs if they did decide to take the path of destroying Israel, and in the event they did do so I could hardly even be mad at them, even though the implications of them doing so would unfortunately almost certainly lead to an erasure of so much Jewish history and culture. The land of Israel has historically had a significant Jewish presence, and even though they've taken it back for the time being, I don't know if I see that as enough reason to warrant an overwhelmingly Jewish state in a historically multiethnic area. Israel was never entirely Jewish from what I understand, and if the Jewish people could coexist with the other peoples in the past, then I'm hoping they could go back to doing that.
TL;DR I think Israel should surrender their disproportionate power, cede their illegal and legal possession of land, and give ethnic and religious minorities more rights, and whatever happens to them as a result is probably justified, though I prefer the Jewish people aren't completely erased. Perhaps an Arab nation with a Constitutionally-protected Jewish minority could be ideal.
P.S. On a side note, outside the main scope of my post, which mainly pertains to Israel's relationship with non-Jewish peoples and surrounding nations, I also think that Israel should be more focused on getting golus to make aliyah to assure that if the nation of Israel ever does lose political power, the Jewish people who remain in the area of Israel still retain power in numbers, though I couldn't blame a Canadian Jew for instance for not wanting to move to a nation like Israel, where political, religious, ethnic, and inter-Jewish ethnic/religious conflict is quite a big problem.