They can stay, but they will have to pay rent to the owners of the property that they've squatted.

I have no problem with the Israeli government paying reparations to all the Palestinians who lost their homes and their citizenship, in addition to granting them citizenship in a single state.

You do know what American law and customary practise says, don't you?

Yes. American law and customary practice says that when one nation militarily conquers another, the conquering power doesn't owe the old group anything. Just ask the Native Americans, or Hawaiians. Or, for that matter, ask the Christians in Palestine and Syria and Egypt after the Muslim conquests.

American law and customary practice also holds that when wrongs are righted, reparations are not paid, ever. In his article "The Case For Reparations", Ta-Nehisi Coates makes a fantastic case that between slavery, Jim Crow, and the continued structural racism of the 20th and 21st century, the US owes it to Black people to try to make things right. But you and I both know that the chance of this happening is nil.

But I imagine that's not quite what you meant.

You're asking for Israel to be hold to a higher standard than other colonizers and conquerers have historically been held. That's fine; I think that Israel should be held to a higher standard, too. But you're not going to get my support -- or the support of any other Jew -- if you think that people who were born in Israel, and whose parents were born in Israel, need to be personally bankrupted and/or exiled, just because they were unlucky enough to be born within the internationally-accepted borders (and I mean on the Israel side of the Green Line) of a country that has been illegally occupying another.