The problem with Deuteronomy 20 is that the religious requirement for the genocide of the previous inhabitants of Palestine leaves a cultural legacy that continues today with ongoing ethnic cleansing.
I see only two ways around it:
1) the corruption apology: agree that Moses was a prophet who was communicating God's word, but decide that the words we have today are only an unfortunate corruption of the original message, and God would not have called for genocide;
2) the monotheist apology: decide that the polytheism of the original Palestinians was the reason for calling for their slaughter (and a legitimate reason for uprisings against the Roman Empire), and that the Palestinians of today should be treated more equably because they are monotheists who - whether Muslim or Christian - recognize Moses as a prophet.
The first of these is in accord with Islam, but not acceptable to religious Jews. The second one might work for everyone, however. I don't know if anyone is advocating it within Israel, but I assume someone must have thought of it.