Do "Israeli Arabs" go to the Army in Israel? I suppose not.
Of cousre it would a madness to let them into IDF, but if they want their citizenship or residence, they should do some National Service outside the Army, and the same would apply to Palis in Yesha.
Just make them work for Israel for 3 years. I think they'd voluntarily leave the country, and noone can say Israel is unfair to them. In most countries if you refuse national service you are not even allowed to leave, you are either taken to prison or even executed for treason.
In Argentina, when there was National Service, everyone who deserted was taken to prison, no chance to go abroad.