You literally just described a settler state, complete with using reproduction as an occupying tactic.
Israel, the state, is illegitimate and needs to be dissolved. The Israeli people can integrate and co-createba society with the Palestinians or they can GTFO. Any that stay to explicitly disrupt this and form reactionary movements can get rekt.
However, as you say, this reality won’t stop the genocide. So a two-state solution is the most likely interim step.