Of course, this is an act of Trump, not of Israel. Let's wait and see what exactly Israel does with it. They may do nothing because they like the way things are now. That's the interesting problem: If you go for the single-state solution all the Palestinians become Israeli citizens and get to vote. Israeli politics changes dramatically.
If you go for the two-state solution, all the settlements are in the Palestinian state. They might want to move back to Israel.
If they do something more radical, like take the west bank and kick all the Palestinians out, the UN comes in to enforce their old borders and kicks THEM out.
That's why I think they will do nothing.
