Fate of Israel after an Arab Victory in 1967

The Arabs had no need or desire to exterminate the Jews- they never slaughtered the Jews in their own countries. The Jews who had moved to Palestinian would have been expelled
The second holocaust stuff is propaganda and nonsense

I mean, except after the establishment of Israel when many Arab countries saw massive campaigns of violence and often legal disenfranchisement of Jews, where thousands of Jews died in rioting from the Maghreb to Iraq, tens of thousands were injured, and the violence basically only calmed down after all the Jews were gone in many places.

In 1948, there were almost a million Jews in Arab countries. By the time the Jews finished leaving Algeria in the 70s, that number was tens of thousands at most. And trust me, they weren't just hoping for the greater economic opportunities to be found by leaving the countries where they were well-established to go to an overcrowded developing nation surrounded by enemies. One can point to many specific situations where there was apparently spontaneous rioting that led to wide-scale killing of Jews - in Baghdad in 1948, where a few hundred Jews were killed, in Aleppo in 1947, everywhere in Algeria throughout the revolution (Jews were seen as agents and collaborators of the French)...

Seriously, is there a single Islamic State that has exterminated the Jews? Jews have lived in Islamic countries for over a thousand years and that never happened

No state ever "exterminated the Jews". Even Germany ultimately failed.

But has a Muslim state ("Islamic" makes it sound too much like a theocracy) ever seen widespread violence against Jews or expulsions of them? Sure! Despite the white-washing we like to apply to Muslim religious tolerance historically, there's plenty of documented incidents: in 1066 in Granada, multiple incidents under the Almohads in the 1140s, in Fez in 1276, in Tetouan in 1790, under Idris I in Morocco during the late 8th century, in 1785 in Tripoli (Libya)...
 
Seriously, is there a single Islamic State that has exterminated the Jews? Jews have lived in Islamic countries for over a thousand years and that never happened

Islam has very little to do with this scenario, but, as Minchandre noted, there is indeed a significant record of events of deadly violence against Jews in Muslim lands, including Medieval times (although I am not aware of any state-sanctioned mass expulsion on a major scale). It is absolutely correct to say that Muslim-majority lands offered more tolerance and safety to Jews, among others, than it was the case in Christian areas, on average.
But the comparison tells more about how nasty Christian anti-jewish prejudice could be, rather than displaying any exceptional Muslim nicety.

(As an aside, it is somewhat remarkable that the extremely harsh treatment suffered by the Jews of Medina according to canonical narratives of the life of the Prophet was never, to my knowledge, to considered to be a valid precedent sanctioning similar action by other Muslim governments in pre-modern times).

This, however, has no import on what would happen in the very unlikely (say, bordering ASB) event of a catastrophic collapse of Israel in 1967.
On this point, I agree that large-scale genocide is unlikely, but it would be pretty nasty for everyone involved. I also do not see rapid relocation of the bulk of Israeli Jewish population. It is even possible that they'd be allowed to stay, were they chose to do so (which I'd suppose most rather won't, after what is almost certainly a bloody and messy immediate aftermath of the war).
By the way, no Arab state would consider things like imposing dhimma upon Israeli Jews here. We are not talking about Medieval sultanates here (ironically, it would be marginally less removed from absurdity nowadays).
 
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