Then just let them have the West Bank and Gaza. Israel could do that unilaterally if it wanted to. Would it solve all their cultural problems? No. But at least they could stop being refugees and start being citizens of a state.Palestinians have effectively been refugees since they rejected UN Resolution 181 and started the war of 1948, along with other Muslim nations.
The fact that other countries, who share more beliefs with Palestinians than Israelis, have previously tried to take in Palestinians and had severe political and violent consequences illustrates why the problem continues to exist. None of the countries want them because they are fanatical, unproductive and a risk to governmental stability.
Edit: I'm not saying that's actually the answer; just trying to highlight that Palestinian refugees still exist because Israel has made decisions that cause them to exist.