I don't think Israel has a problem with "Palestinians" becoming citizens of Israel. I believe there are either 15 or 17 Arab members of the Knesset now. The reality is that the Arabs that have been in refugee camps for decades would have been far better off if they had become part of Israel back in 1948 instead of being part of the attempt to wipe them off the map. The barrier to getting them out of the refugee camps is from the Arab/Palestinian side, and not from the Israeli side. A separate Palestinian state would be acceptable, too, but not if the Jew hating and Jihadist indoctrination continues.