A good subject.
First, a couple of important facts to consider:
1. The Armenians formed a majority nowhere. They were most significant in Van province, where they were under a third of the population. In the six eastern provinces where they were most prevalent, they comprised one sixth of the population.
2. The "reforms" that the powers were always trying to force on the Ottomans, and which they were always accusing the Ottomans of trying to avoid or sabotage, were actually designed to give Christians autonomy and/or rule over provinces where they were often a majority - in essence, severe DEcentralization, which was generally tantamount to surrender of sovereignty and a sure path to imperial dissolution. Ottoman reforms were generally aimed at strengthening the power of the state and its hold over its territory.
3. A very minor point, the Vilayet Law of 1858 replaced Eyalets with Vilayets. They both pretty much mean "province" - Eyalet more explicitly, Vilayet meaning essentially vali-ate (like "governorate") as "vali" meant "governor".
4. Another minor point, if you shorten "Abdul Hamid", it has to be to "Hamid", as "Abdul" by itself means "servant of the". For instance, many people called him "Baba Hamid".
5. Abdul Hamid had nothing against Armenians - the Minister of the Privy Purse, who managed the possessions of the Sultanate and Abdul Hamid's personal wealth, was an Armenian (Agop Pasha). He just had a problem with anarchist separatist terrorist organizations like the Hunchaks and Dashnaks.
Where the Russians generally went wrong with Balkan Slavs and Rumanians was in being incredibly arrogant with them and contolling. With the Armenians, they were pretty awful in general - Almost all Armenians preferred Ottoman rule to Russian (until 1915, and probably an interlude in 1894-5).
I think Hamidiyan constitutionalism could have worked if the Russians had not attacked or been beaten off. Most historians assume Abdul Hamid always intended to dispose of Parliament as soon as possible, but I don't think the evidence supports this. He seemed pretty willing to try it, but the war (and endless criticism of its conduct from Parliament) discredited the institution, and AHII considered the condition of the empire in 1878 so critical that it could only be saved through concentration of all decision-making into his firm and steady hands. He was probably right.
If not for the war, it would have been very difficult to get rid of Parliament, nor would there seem to be as much a reason for doing so.
I think the effects of this are along the lines you describe. The problem with autocracy is that it distorts the administration and causes corruption as loyalty becomes more important than honesty or competence (although AHII treasured the handful of men that were both), especially without oversight by a parliament.
I think the Ottomans would be very sensitive about Zionist immigration to Palestine - historically this was a big problem because the Zionists did not get along well with anyone else, especially the existing Sephardic community. But no doubt as you say the main Jewish centers in the empire like Salonika would be a draw, and might assimilate immigrants into the Sephardic/Levantine jewish culture.
POD: September 1876
Abdul Hamid II, the young Sultan of the Ottoman domains, receives a leader of one of the more moderate (i.e. autonamist, rather than pro-independence/pro-Russian) Armenian factions. The latter has a few names, dates, and plans for outright revolt in conjunction with an invasion from the north. A few days of slightly frantic planning leads to a reasonably effective and limited purge (as opposed to a general deportation) coupled with some political reforms and P.R. moves. Hovhanes Pasha ended his days as the governor of the Eyalet of Ezerum and Abdul Hamid himself would speak at his funeral.
The reforms in Armenia inspired similar changes being proposed for much of Rumelia, but everything would up on hold when the Russians blew thier stack and invaded anyway. The treatment of the Armenians, and to a lesser extent the Bulgarians, as 'traitors to Christiandom' by the invading forces did more to restore the reputation of the Sublime Porte in the eyes of thier subjects and the West than anything the Sultan could have put through in such a short period of time, and several militias were formed to defend against the Russians.
In the aftermath of this the Ottomans (having regained control of Bosnia and limited the Cyprot concessions to a few bases) settled down to formally set up the miltiethnic, multiconfessional constitutionalism of the Young Ottomans. There are no further autonamous areas (the memory of what happens what _those_ are set up being too fresh) but the parlimentary seats from each eyalet are subpartitioned by millet and the Eucemenical Patriach kets strongarmed into appointing autocephalous Bosnian and Bulgarian Archbishops. Meanwhile the militias are reorganized as 'The Sultan's Own' regiments and receive various perks from COnstantinople. In the coming decades most of Abdul Hamid's OTL reforms get through along with increasing democratization at the local level and stronger anti-corruption measures. Local potential leaders are encouraged to come to court and receive honors/positions, while Jewish immigration from Russia and other mathologically anti-semetic places is encouraged (Salonica, Metro Constantinople, and the new levantine town of Tel Aviv being the main points of settlement).
Abdul the Great (at least that is what the Armenians call him, at least one Turkish nationist tried to assassinate him) dies in his sleep in 1918 and is widely eulogized, although it is not known how well his successor will continue the balancing act between Germany and Britan that consumed Abdul-Hamid's forgien policy.
Now what?
For that matter, how is the wider world affected?
HTG
