Where exactly are the Palestinians supposed to settle? The Israelis took their land, homes, and businesses, so a great many Palestinians are impoverished. Many can't afford to move. It's not like the Palestinian government can just purchase land and build new cities elsewhere as it's poor too. If the Palestinians were to all move to any other country, they'd largely be refugees, reliant on their host country for food and shelter, which is a huge financial drain. Who is going to take and care for all of them?
And if they were to move, Israel would take over the evacuated area. It'll be enough for awhile, but the population is ever growing. Who will Israel invade next?
All labor is skilled labor. Can you think of any job that doesn't require learning some sort of skill(s)? It's just an arbitrary designation intended to justify low wages.
I'm highly educated but you couldn't just stick me into a traditionally "unskilled" roles for which I have neither experience nor training and expect me to function. I'd crash and burn because jobs require the development and utilization of... wait for it...skills.