As for the future of Israel: Listen, anyone who has any semblance of leftism left in their body has been gravely worried about this place since at least May 2021.
There is a growing, I would even say majority view, in Israel that the two-state solution is long dead and we are waiting for the world to catch up. That means that the future is either some kind of single 'nation of all its citizens', deeper entrenched apartheid, or - worst case scenario - forced deportation and ethnic cleansing.
The problem is that the 'nation of all its citizens' thing is very unpopular with both Israeli Jews and Palestinians. It's hard to see a path forward that isn't very very bad, because you are right: This will not increase support for a single liberal democratic state. Stuff like this bolsters Hamas and the Israeli far-right, who seem to just want all out war to the end.
So in short - I see little to no reason for optimism, in the near or distance future. I'm sorry.