ChabadShlucha,
Forcing people to take compensation or move is not practical or moral solution. Besides where would they even move to? They were living in what is now Israel for hundreds of years. Imagine Native Americans coming into Brooklyn and demanding that it’s residents accept a small amount of money and move to Canada or Mexico or something. If you gave the Palestinians in Gaza and the west bank full Israeli citizenship Israel would not be a Jewish state within a year. All the Laws that make it Jewish would be voted out.
Again if you want Israel to be a Jewish state you either need to have an apartheid state where the Palestinians have no voting rights etc, kill all the Palestinians, or give them a state.
Maybe this is why some of the Gedolim were against the idea of a Jewish state. It’s a real problem.