He wanted it as a vassal state (“an entity less than a state,” in his own words), but he also understood that the (as of his time) would eventually destroy Israel. “Break their bones” Rabin was, as one would expect from a Zionist, the scum of the earth, but he was smart scum of the earth and clearly thought that a permanent settlement with Palestinians was necessary for the long-term survival of Israel. Well now the dominant faction of Israeli politics is against any such settlement; there’s nothing about this he would’ve loved except for the number of dead Palestinians.