What would happen if Israel stopped aggressively colonizing and illegally removing Palestinian homes?
I think you should try to reformulate the question.
If you are talking about a hypothetical scenario where they never did this. I would be unable to answer. If this was I think you are expecting me to agree that Hamas would never exist but terrorist attacks against Jews were a thing way before the 6 day war and with the diaspora in 48, tensions could be enough to create a terrorist organization like IRA. But this is too much of a hypothetical scenario to give a proper answer and would look too much as whataboutism to me.
If you are talking about stopping this acts after the war is over, my answer would be that this is not enough. There's enough bad blood between the parties that more actions would be needed to fix the situation. What I stated before as a solution would be a independent region (Palestinians would be lead by their own but the state would still be under - without true sovereign- ONU and Israel to smash any new terrorists groups that may emerge) that would be able to send representatives to Israel to allow dialogue and a small control over the laws to avoid abuses, until a eventual release as a true Palestinian state. Basically a slow process to try to heal the wounds and eventually create two states.
I'm sorry but your question was a little open ended since at this moment both sides are at war. IF you are trying to mean something else, I would ask you to reformulate the question.