Best option: 2 state solution, with boundary drawn as it was originally (before any of the Palestinian land was wrongfully seized) and reparations paid to the new Palestine by Israel for all past oppression.
And how are you planning to destroy, for example, the city of Ariel where there are 18,717 citizens plus a university? Or any of the many other cities? Land swaps are inevitable if you want an agreement. But you don't seem to want an agreement, based on your suggestion for reparations.
I'm not going to say this is my preferred position (I like the one-state solution), but the Jewish/Israeli people of Ariel can stay if they want and become Palestinian citizens. Or they can leave, which they probably would. No one needs to destroy the city; other people would live there. That's not even slightly unusual in world history, especially recent world history.
If you were talking about a city right on the border, land swaps might be workable, but Ariel is deep in the West Bank. It is part of Palestine in any realistic two-state solution.