A Herzog government that relies on Arab support would be much more inclined to make major concessions. Whereas Netanyahu sees the settlements as a “plus” for Israel, and would only give them up for a high price, the left in Israel sees them as a liability and would be happy to pull back.
In addition, a Herzog government that needs Hareidi support (both to reach the magic “61” and to minimize objections from parties such as Kulanu to including the Arabs), will radically change Israeli society by either ending conscription or allowing liberal draft refusal on any religious or conscientious or moral grounds. In addition, a Herzog government will be desperate to raise standards of living to in part justify concessions in security matter (e.g. a “peace” bonus will need to be paid, even if there is no peace).