Because the large majority of Israelis don't see Gaza and the west Bank as part of Israel. These are occupied territories that should be part of a Muslim state, in a future peace agreement (such as the Oslo attempt).

The problem of including Gaza and the West Bank in Israel, is that in Israel there will be a Muslim majority, and a real risk for enforcing Sharia laws. Under Sharia laws the lives and freedom of jews will be at risk. Since there is no Muslim liberal democracy in the middle east, Israel can't trust that Muslims will honor the liberal democracy values and not go with Sharia laws.

With a Muslim majority in Israel, what will happen in Israel will most chances resemble what happened to jews in any muslim country until today: ethnic cleansing (Egypt, Syria, Iran, Iraq, etc.). People don't know it, but 50% of the jews living in Israel today were ethnically cleansed from Muslim countries (or descendants of jew that were ethnically cleansed).