One cost not mentioned here is the reparations cost of compensating the State of Palestine for all of the damage the occupation has cost – will likely run into billions.
“….The occupation translates into significant costs for Israel which Israelis are acutely aware of:
Financial costs: A study by the Adva Center found that the occupation has cost Israel NIS 55 billion between 1988 and 2015 (that is a little over US$15 billion).
Human costs: Every Jewish Israeli family knows that the occupation means sending its young people to risk their lives ruling over the lives of another people, the Palestinians, in order to protect Israel against attacks from Judea and Samaria. Young Jewish Israelis and their families would greatly benefit from the end of the occupation.
Costs in public opinion: The fact that the occupation continues with no end in sight is the main reason why Israel continues to lose support in Europe and North America. This could result in dire consequences for Israel as I wrote previously.
Costs in relationship with Israeli Arabs: Israeli Arabs are ethnically Palestinian. The fact that Israel still occupies their fellow Palestinians in Judea and Samaria is a significant obstacle to Israeli Arabs feeling as patriotic as their Jewish counterparts. Peace with the Palestinians would facilitate better integration of Israeli Arabs into Israeli society, including its political system…..”