Updated version, now with some relief shading! Aesthetically, I think this is the best work I've done. Click for bigger version (caution, the file is big):
Good questions. Some of the population figures are ASB to make it work, but conceivably higher pre-war immigration and higher birthrates could make it happen. The three big divergences are (a) following creation of Israel, a large chunk of the Palestinians "rediscover" Samaritan roots; they do not become "Jews" really, but they kind of sit out the conflict after this, (b) King Hussein is overthrown in Jordan in ~1970 leading to a very different 1973 war, and (c) much much larger immigration from USSR/post-USSR and the USA to Israel.
Lebanon and Jabal al-Druze are Israeli supported protectorates run by Maronites/Greek Orthos and Druze, respectively. This leads to pretty big upheavals. Syria/Iraq collapse into several states.
In some sense the timeline just represents an expanded version of the OTL conflict. The WB is annexed and is demographically stable and the conflict over settlements/occupation/security instead revolves around Transjordan.