Interesting idea!  However, I think that most Israelis would not be willing to move.  In general, people don't like to move & Jews have a religious attachment to Israel & an historical attachment to Israel.  They believe it's the promised land & the land of their ancestors.  For thousands of years, Jews have said "Next year in Jerusalem" during the Passover seder.

Alternatively, you could offer land to the Palestinians for a Palestinian state, but I don't think that they would be willing to move either.  If the Palestinians were interested in their own state, they would have declared independence in 1948.  Instead, they asked for union with Jordan.  I think that some Palestinians want to stay close to Israel because they believe that if they can martyr themselves while murdering Jews, they go straight to heaven.