To make an analogy to dogs (and in this analogy the Americans are unusually friendly and intelligent canines), the Arabs are and have for most of our history been fairly moderate as beasts go. As long you don’t threaten them, or boss them around, or get in their way – they will probably like you. Around World War I we started pulling their tails and they got very annoyed. We went along with the Brits in double crossing the Arabs after the war ; at first we worked with them for an autonomous Jewish homeland within the large state the Arabs were offered for helping the Allies in the war, but by the mid-20s the zionists were firmly in charge of the Yishua and were supporting the Brits – frankly we are lucky that most Arabs didn’t flock to the Germans in WWII since it might have changed the outcome but the Arabs generally realized Hitler would eventually turn on them as well – the “Mufti” tried but couldn’t find any support.
Based on past experiences, in a post-zionist Eretz Yisrael (i.e. after the haredim become a minority and are willing to compromise on sovereignity in return for peace), the Arabs won’t object to Jews learning Torah (as long as we cover our own bills, and the most frum of the hareidim already do). They won’t draft us (under Islam, Jews didn’t have the right to bear arms). As long as we give them political control and don’t try to impose alien values on them, they will tolerate us. That has been their past pattern and there is no reason to think the past won’t repeat.
We could be active economically, certainly to a much greater extent than under the zionists, as long as we don’t get too bossy. We have only limited political rights meaning we’ld have as much control of the country as we do under the zionists. The legal system would be no more rigged against than it is today, but they would respect communal autonomy.
The hilonim would be the big losers. The infamous sort of tourism that Tel Aviv prides itself on would be banned. You wouldn’t have a Jewish girl at the Miss World contest, nor an Israeli diplomat sat the UN. Pork breeders would be in trouble. While the Muslims share a belief in a welfare state, they also have a belief in not running an economy based on printing money, so no more welfare state to sponge off of.
We should tolerate the zionists treating us as “second class citizens” as long as they don’t do something too oppressive, such as drafting yeshiva students or women. But if they did, they will be approaching a tipping point where it be time to consider going from being second class Israelis to second class Palestinians.