Answer:
Israeli Arabs have the same rights as Israeli Jews and therefore can choose to live wherever they want within Israel or Area C in the West Bank.
Unlike Jews however they can also settle in Areas B and A where Jews are prohibited to enter by law.
However few Arabs choose to live in settlements, except for Ariel where many Arabs study in the Shomron Academic Center, and few Jews in Judea and Samaria would like to have Arabs for neighbors.