This pops up every so often; there was a thread on it just a few weeks ago. "What about a French-majority enclave, maybe around Oran?" is a question that gets asked.
1) Oran had a lot of settlers, but they were still a minority. If we don't move anybody out or in, the settlers would be between 30% and 50% of the population, depending on how the borders are drawn.
Thus, Oran could not be made secure without some combination of a massively militarized garrison/security state and/or ethnically cleansing the large Arab minority.
2) There would still be several hundred thousand settlers outside of Oran. Many of these people own farms and plantations; in some cases, they've been there for generations. Not all of them will want to move to Oran.
3) The economic difficulties would be nontrivial. While Oran proper was industrialized, it was doing things like agroprocessing and light industry -- turning Algerian cotton, corn and tobacco into textiles, canned foods and cigarettes. These light industries tended to be labor-intensive, and so relied on a supply of cheap Arab labor.
So that gives French Oran a nasty choice -- expel its Arab population and let its light industrial sector collapse, or keep them and deal with some very alarming security concerns. Google the Oran Massacre for just how bad this could get.
Additionally, if French Oran faces a hostile Algeria -- which of course it will -- then it's cut off from the agricultural hinterland upon which its economy depends; the cigarette factories and canneries go dark if you can't bring in that cheap corn and tobacco.
So you end up with a rump colony that's an economic basket case /and/ that needs a large military garrison. This adds up to a fairly huge burden on the French taxpayer,
4) In any event, an Algerian Ulster was ideologically unthinkable to both sides. France was insisting that all of Algeria was "Algerie Francaise", so dividing it would be a very painful admission that it had been a colonial relationship all along. And the Algerians, of course, were not prepared to settle for anything less than full independence for their whole country.
The OAS seems to have had something like this in mind, but with an independent settler-dominated coastal strip. As I've written elsewhere, at best you get a smaller, poorer, meaner, dumber, more paranoid and much less secure Israel. (At worst you get a long string of massacres.) One could reasonably ask why anyone would want to live there.
Doug M.