In answer to the DUmmies' brainless title question, I'd imagine what would happen in those circumstances is the Palestinians would then begin bombing the American settlement.
They want to control the land, and will declare war on anyone else living there.
In fact, in that scenario the DUmmy envisions, the Palestinians' attacks would likely become even more vicious and destructive than they are now, as the Palestinians would view it being bulldozed to build the American settlement as a desecration of the land that they think is rightfully theirs (Even though it of course isn't) and would thus be hankering for revenge as much as for control over the land.