As discussed in the two other threads on the front page at the moment, Israel has, at points, agreed to dismantle some of the settlements in the territories in exchange for peace. It should also be noted, as it was in at least one of those two threads, that the vast majority of land that the settlements are built on was, in fact, never privately owned and that by far, most of the land in the territories would have been state/waste land, and without a sovereign power its disposition is less than certain. On preview, as Alessan points out, there is also a difference between settlements that are illegal under Israeli law and the claim that any and all Israeli presence in the West Bank is a violation of Palestinian land claims to that area.
Further, your formulations are a bit odd, as some ‘settlements’ consists of Jews who returned to Jewish areas of residence which were ethnically cleansed circa 1948. Like everything else having to do with the region, simplistic formulations are a hindrance, not a benefit. Not to mention that Israel will not, at any point, return 100% to the Green Line, it just won’t happen. UNSC 242 (while non-binding) was based off of that logic and, for historical reasons, Jerusalem itself is unlikely to be up for negotiation.
Further, the PLO was founded before the 1967 war with the goal of destroying Israel itself as a nation. Hamas, likewise, has made clear that they do not differentiate and believe that all of the region is to be considered a Waqf due to Muslim conquest. Both Hamas and more ‘mainstream’ factions of the PA have and continue to advocate anti-semitism, genocide and a rejection of the right of Israel to exist at all (and/or a denial that Israel does exist, at all, as anything other than an illegal occupying force of “Palestine”, by which they refer to 100% of non-Jordanian Mandate territory). And such advocacy/education not confined to the argument over who owns what in the West Bank. Additionally, as agreements like the framework laid out at the 2000 Camp David Summit would have dealt with a huge percentage of West Bank land, Hamas et al already had ‘incentives’ and they proved to be non-incentives from the mindset of those groups.
So, will Israel turn over a non-zero percentage of West Bank towns/villages when any Final Status negotiation goes through? Yes. Will it, most likely, resemble Clinton’s Bridging Proposal? Maybe. Are groups like Hamas, the militant factions of the PLO, etc… going to be willing to deal if Israel were to retreat to the Green Line tomorrow? No.
As for the ‘right of return’, the idea has already been proposed that the actual refugees (and/or their descendants ,and their descendants descendants descendants, etc… as defined by the UNRWA as refugees) will receive compensation at a negotiated rate. Ironically enough (or, perhaps, predictably enough) claims for Arab compensation are never twinned with claims for the roughly equivalent number of Jews who were forced out of their homes circa 1948 to be compensated, as well. Most likely the Jews who were forced out by the Arab governments will never receive compensation while the Arabs who were driven from the area by war and/or Israel/Arab policies will receive some form of compensation. Such are ME politics.