Israeli settlers have, for years now, been slowly encroaching into territory officially recognized as Palestinian lands. These people absolutely have the choice to move back out of those areas and into lands officially recognized as belonging to Israelis. On the other hand, very few people can "just move, lol" and I wouldn't be surprised if Israel specifically chose settlers that would be burdened economically if they attempted to leave.

To be clear, Israel has continuously acted in bad faith against Palestinians and, along with its allies, destroyed the peaceful (or, at least, less militant) groups that sought to unite the Palestinians. This is absolutely a problem of their own making and I would be surprised if there was a peaceful path forward with the current political climate in the region.