Ummm... no. The Arabs created the PLO, with some cheering on from the Euros. Your claim is an exceedingly delusional one.
begin assimilation of the palestinians as future citizens
Assimilation of large masses of Arab Muslims into Israel as citizens is impossible. The only way these people will ever become citizens of Israel is as corpses. They can then be dead citizens. Live, they'll be human bombs with rabies, bent on the final destruction of anything Jewish, be it the state, the religion, or the people.
But you know all this.
There are Arab Israelis who fought alongside Israeli Jews in all three wars. They consider themselves loyal Israeli citizens. How can that be? Because they have a stake, and they know that whatever social, moral or ethical problems their government has, it beats the heck out of the corrupt states surrounding them.
As for the PLO, Israel agreed to self rule except for military units, and in essence helped to create the racketeering organization. Of course, easy to point fingers in hindsight, but I don't think its a policy that bears any fruition of peace, and annexation and assimilation do.
Right you are. It was Hamas that the Israelis created and funded.