Koestler wrote a fantasy book. He never insisted that his book was a scientific study. It was a pure speculative fiction. His hypothesis was long ago refuted by historians, since it had very little support by factual evidence.
The true history of Ashkenazis is also well documented can be verified. Most of them came to Europe via Northen Africa and Spain at the wave of the Arab conquest. Some arrived even earlier with the remnants of the Roman Empire.
Obviously, each side tries to grab as much as possible (and prevent grabbing by the other side) to improve its negotiation positions for final settlement. It is not a secret that each side would ideally like to have everything for themselves. But that’s were the compromise comes in - no side will get everything they want. What will be the final agreement is a matter of negotiations, but meanwhile each side tries to establish “facts on the ground”.
If you ask me what should be the final settlement in my opinion, I can tell you. But it will be only my humble opinion.