It would freeze the geopolitical situation and put an end to the reciprocal missile strikes, assassinations, and sniping.
[...]
But there is no money in this model! How can Israel fleece the American taxpayer out of tens of billions of dollars in military aid against the "existential threat of Islamic terrorism" if there is peace?

I partly disagree with this. Even if a stalemate is made, there can still be an arms race of sorts. The US and China are not officially at war presently (Russia v. Ukraine support aside), but they're still trying to assert dominance.
Weapons research (and perhaps development) won't just stop. People won't magically stop hating their foreign adversaries. Radicalization and recruitment can still happen.
I venture that the Israeli grift will continue so long as they pretend to promote "American" or "democratic" "values."