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Nor can Israel retain the land seized in the 1967 and 1973 wars.
The land was not seized from the Palestinians - it was taken by the countries that were attacking Israel.
Jordan ceded control of the West Bank (granted by the UN) to Israel.
Who else was going to take it. It was also part of the original Palestine that was intended for the Jews by the League of Nations (reference is courtesy of Kyle)
Egypt dumped Gaza for the same reason.
Neither Arab nation wanted the headaches that the land was causing nor wants it back.
Therefore there was no nation willing to take responsibility of that land.