A merging of the Iseael and Palestine would be acceptable. Aside from the fact that the "right of return" is hardly guaranteed, the two coming together with a stringent foreign security to stabilize the region would most definitely help. Palestinians would likely immigrate to Egypt and Jordan while still not being oppressed as the region stabilizes.
It's a win-win for both sides: A state for Palestinians without oppression, and the survival of the Israeli state.
Why on earth would Palestinians in a functioning one-state solution voluntarily emigrate to economic basket cases that currently want them even less than the Zionists do now? If anything, a functioning one-state solution would face immigration pressure from Egypt and Jordan, not the other way round.