The question comes up over and over: should Israel give up land for peace?
There are several reasons why Israel should not trade land for peace, not the least of which is that "land for peace" defies common sense.
Peace comes when the adversaries sincerely want peace, i.e., they have had enough of bloodshed and wish to focus on building rather than destroying. Genuine peace can't be bought or bartered, because the side that demands land (or money) has even less incentive for maintaining peace once it has been paid off.
Note also that Israel's enemies demand Israel give back all of the land captured during the Six Day War. Part of what they are trying to do here is get Israel to lend credence to their claim that the land is under "illegal occupation." They also know that Israel will never give back all of the captured land as it would leave the country indefensible; it's a great PR ploy for them to demand something they know will never happen.
Aside from what Israel's enemies demand, is Israel morally obligated to eventually return all of the captured land? Just the opposite: Israel is morally obligated to never give back all of the captured land. Contrary to demands that Israel return to its '67 borders, Israel's enemies never recognized Israel's '67 borders.
To give back all of the captured land would be wrong for three reasons: 1) it would send the message that there is no penalty for attacking Israel for 50+ years, 2) it would be to dishonor those who died or were wounded defending Israel since 1967, and 3) it would leave Israel with indefensible borders. (There are many other reasons that argue against it, such as that it would mean relinquishing Judiasm's holiest site to people who have repeatedly desecrated Jewish holy sites.)
When Israel's enemies are truly ready for peace, they -- like Egypt and Jordan -- will stop demanding all of the captured territory. Israel has already given back most of the captured land (the Sinai) and has offered 97% of the West Bank and Gaza. Given how small Israel is, and the existential threat it faces, if Israel's enemies truly wanted peace they would accept 97%.
Holding out for 3% plus the right to settle one million Arabs inside Israel, plus their maps showing "Palestine" encompassing all of Israel, shows that "peace" is not what they are after.