Collapse of the Israelite Invasion Theory

The sixth book of the Hebrew Bible, The Book of Joshua, explains the the invasion and conquest of Canaan by the Israelites. According to the text, Joshua first sends spies and then later crosses the Jordan river. The Battle of Jericho follows and finally he attains victory at a place called Ai. There are other military campaigns and Joshua leads the confederation of twelve tribes completing the task started by Moses. The book gives credit for all this to Yahweh, for it was he who divided Jordan and broke down the walls of Jericho.
According to Biblical chronology, this destruction of Canaan should have happened in the 13th century BCE, but archaeologists found no evidence of extensive conquest and destruction. Some sites were not even occupied during this period and there were no walls in Jericho during the time of Joshua.

They have found really no evidence of extensive conquest and destruction in thirteenth and twelfth century archaeological layers. Some of the sites that are said to be destroyed by Joshua and the Israelites weren’t even occupied in this period, the late Bronze Age, beginning of the Iron Age; the Iron Age begins around 1200. Excavations at Jericho and Ai indicate that both of these towns were laid waste at least 200 years before the probable time of Joshua; so there weren’t even any walls in Jericho at the time of Joshua. Of 20 identifiable sites that were said to be conquered or captured by Joshua and the next generations, only two show destruction layers for this time, Hazor and Beth-el. And yet interestingly enough, Hazor’s capture described in Joshua is contradicted elsewhere in the Bible, because in Judges 4 and 5, it is still a Canaanite city. It is said there that it is still a Canaanite city and Joshua failed to take it.[Lecture 12 – The Deuteronomistic History: Life in the Land (Joshua and Judges) [October 18, 2006]

Since archaeology disproved the invasion theory, the next best bet was a migration theory. The 13th century BCE was a period of disruption in the Western world. Mycenaean Greece was collapsing; Trojan wars were happening; Hittites were moving to Anatolia and people were migrating from Greece to Egypt,  Phoenicia and Canaan. One set of people who arrived by the sea were the Philistines and they settled in what is now the Gaza strip. According to the immigration model, the Israeli settlement happened around the same time as the Egyptian power weakened.
Archaeologists found new settlements all over the region, mostly in the hill country dating to the 13th, 12th and 11th century in the regions which the Bible identifies as Israeli strongholds. This could mean that a new layer of occupation (in the archaeological sense) was created. Also the Merneptah Stele,  dating to this period, mentions Israel. There was one problem though: the material goods used by these people were not different from the Canaanites, except for the lack of pig bones. There was no evidence of invasion which could mean that these settlements could have been established peacefully and could have been established not by outsiders, but by from within, just like what happened in Crete with the Minoans.
If the Israelites were insiders, there are two models to explain that. According to the Internal Revolt model, they were locals who triggered a social revolution. In the 14th century BCE, there are letters written by Canaanites to the Pharaoh complaining about people called Haribu or Aribu. The Israelites escaping from Egypt joined these people and established a Yahweh worship based system. This was proposed by the documentary Bible’s Buried Secrets as well.
According to the Gradual Change theory, Israelites were simply Canaanites who, for some unknown reason, developed a separate identity and moved into the central highlands. There is no explanation also as to why they switched to the cult of Yahweh. The were not a united people, but were joined Egyptian slaves and  local foreigners. One of these groups, brought with them the the worship of Yahweh and maybe another brought the story of Exodus.
If migration, local revolt or gradual change could be the reason how Israel got control over Canaan, then why does the Bible talk about conquest and destruction? Like the writers of any other ancient text, the Bible writers were trying to tell a story within an ideological framework; their goal was not to accurately record what happened. If they were a group of people who were different from the Canaanites, who had taken to a different lifestyle and a different god, it was important to distinguish themselves clearly. To keep the new group, which consisted of diverse set of people together, the old group had to be put down. Centuries later Christians used the same techniques against the Jews.
Another point is that, the Bible was eventually written down during the Babylonian exile, six centuries later.

Consider the position of the Israelites in the sixth century, the time of the final editing of the Deuteronomistic history. The Israelites are sitting in exile in Babylon. They are trying to make sense of the tragedy that has befallen them, the loss of their land. Consider how a text like Joshua 23 and Joshua 24 would go a long way towards explaining their fate while retaining faith in Yahweh.[Lecture 12 – The Deuteronomistic History: Life in the Land (Joshua and Judges) [October 18, 2006]

References:
1. Introduction to the Old Testament, Lecture 12 by Prof. Christine Hayes, Yale.