I think it would be very easy to find evidence that the Palestinians would want to declare an official religion and law system based upon Islam. By nature though that would be incompatible with a free and secular society and it certainly detracts any possibility of equality in law for anybody who isn't Muslim. The evidence of that is well plainly obvious throughout the Middle East.Why wouldn't they? Plenty of Arabs accepted living within the borders of Israel even as second class citizens. Given respective birthrates the Arabs would also be the majority in the multi ethnic state within a generation. It's the Zionists that aren't prepared to live in a society where there's a racial hierarchy.
Jews who aren't proponents of Zionism aren't a threat to peace or Palestinians. I would rather that Zionists chose to live elsewhere if they can't get over the idea that they have a special value.
Why is a Jewish equivalent of Salt Lake City/ Utah an evil idea?
You only have to look at how many non-Muslim people comfortably live in the more modern Islamic countries such as Saudi Arabia, it's very few. With outright hostile countries such as Yemen or Syria you can count the number of Jewish people living there on one hand.
The closest example is perhaps Turkey but whilst Turkey is predominately Muslim Turkey is no different to the west in that it does not have an Islamic law based system such as Sharia.
Do the Palestinians want to live and coexist with Jewish people and others in a secular state such as Turkey? I seriously doubt it. At the very least they want to stop dying and maybe would accept such a state on those grounds but ultimately that isn't what they want. What they want is an Islamic country and for the Jews living in Israel to go away which is sort of no different to the Zionists in Israel.