Even if there were no expansion of any kind, the Palestinians would pull out a red herring as you say, as an excuse to refuse to go to the negotiation table. Since 1948 Israel has tried to get these people to the negotiation table with no success. In 1948 when the Jews were granted that small sliver of land which up until then Palestinians had no interest in as a Jewish state, what did the Arabs do? Invade with an overwhelming army that was routed up and defeated by Israeli defence forces. Since that time like a whinnying wife all the Palestinians do is take all the aid and assistance afforded them and still they vow to destroy the Israeli state because they made some useless land they originally had no interest in and turned into a prosperous democratic state.
Do you know anything about the conflict leading up to Israel's formation?
The Zionists wanted a Jewish State in a place where Jews were a minority. By the mid 1930s they had formed the Transfer Committee, led by
http://en.wikipedia.org/wiki/Yosef_Weitz, whose mandate was come up with ways to remove the non-Jewish population and replace it with Jews arriving from Europe. Their most notorious plan was ship the Palestinians off to Iraq, but fortunately they couldn't get the backing they needed to make it happen. Nevertheless, Weitz continued to plan out the ethnic cleansing of what was to become Israel.
In 1947, after a sustained campaign of terrorism carried out by the Irgun (Menachen Begin's outfit), the Stern Gang ( Yitzhak Shamir's cadre) and some of the Haganah forces - a campaign that included massacres, bombing civilian targets, kidnappings, and ethnic cleansing- the Zionists declared the existence of the State of Israel. This new Jewish state included lands that had been set aside by the British for the Palestinian State that was supposed to come into existence at the same time. And it was not by chance the Palestinian land had fallen into Zionist hands. Weitz, David Ben Gurion, Moshe Sharrett, and other early zionist leaders had identified land they wanted for Israel and made sure it was in the hands of Zionist forces before the declaration of Israel's independence. Land seizures, and the forcible removal of Palestinians from their homes, farms, and communities, continues to this very day.
You don't have to take my word for it. Everything I have said is easy to confirm. Just start with Weitz and follow the trail through Ben Gurion statements about seizing orange groves and fertile farmland, Sharrett's declarations in the Knesset about never allowing Palestinians to have recognized land rights, and beyond. Eventually you'll get to the Oslo Accords and why they failed, and that will give you a pretty good idea why the US is pushing Israel to stop expanding into land that doesn't belong to it.
ETA: this part of your post: "still they vow to destroy the Israeli state because they made some useless land they originally had no interest in and turned into a prosperous democratic state", is just plain bullshit. Jerusalem and it's environs was not useless land, the people who lived there had a great deal of interest in it, and their prosperity was taken from them when Zionists took their homes, farms, and businesses by force. Once again, I urge you to look into Yosef Weitz and the Transfer Committee. It was Weitz' job to decide which Palestinian properties (made vacant at gunpoint) would be given to Jews, and which would be destroyed to prevent the return of people the Zionists wanted gone.
Just because thieves are prosperous doesn't mean we should admire them.