See my reply to AA.

I don't even know what you mean by the last part, if it isn't the unlikely interpretation in my subject line. The territories 'Europe' took in conquest are now independent nations or parts thereof, hence they are no longer Europe's to give back to anyone. But you do make a valid point in the sense that many on the European left see Israel as comparable to the European conquests in colonial times - and hence feel that, like in other former European colonies, the European 'colonists' may have a right to keep living there but no right to oppress the native population. Which is why so many draw comparisons to South-Africa before Mandela.

I don't say I see Israel that way myself, the issue is far more complex than that and viewing Israeli Jews as comparable to Afrikaners in the era of apartheid conveniently overlooks Europe's historical responsibilities. But there are certain similarities, and it's easy enough to see how things would look that way from the perspective of Palestinians.

And as for what Israel should do - they could have taken over the Gaza Strip and the parts of the West Bank they don't fully control already easily enough. It might actually be good for the Palestinian population, in the short term, but they don't do it because what on earth will they do in the longer term then? If they go down that path, the only likely long-term outcome is a one-state solution, which they would no longer dominate. A two state solution in which Israel remains a Jewish state requires a functional Palestinian state, which in turn requires functional political actors who can create and develop such a state. Not necessarily Hamas itself, but then a leader or a movement strong enough to draw away Hamas' support, which Fatah or Abbas clearly aren't.