So far, everything the terrorist organizations have done (Kill civilians, destroy infrastructure, assassination, Capture/kidnaping) I've seen Israel do on an even larger scale.
There's killing civillians, and there's targeting civilians. And yes, I admit that according to all reports, we killed some of those civillians we told to flee. I have no clue why that happened; I've been out of touch with local news here, so I haven't heard any explanations, mistake or otherwise. But that is one instance - an exception - up against how many suicide bombings
targeted on civilians... attacks which, I might add, are
not "mistakes".
Destruction of infrastructure happens in any war. We just have more weaponry. I make no apologies for Israel's destruction of bridges, etc. You want to (figuratively) cry over a bridge? Go right ahead. I'll be laughing at the bomb-wrapped terrorists standing helplessly on the other side because they can't swim.

Assasination. Aside from the killing of Israel's Rehavam Ze'evi a few years back, I don't recall any assassinations being carried out by the Palestinians or by Hezbollah. That's mainly Israel's doing, and I'll not have you giving the Palestinians any undue credit for it!

Kidnappings. We're both guilty of this. They've kidnapped and killed IDF soldiers (among them one Druze, I might add) and one Israeli citizen. We've arrested (I guess you could draw some sort of parallel) hundreds, if not thousands, of Palestinians involved in terrorism. Again, I make no apologies here whatsoever.
If Israel does give back the West Bank/Golan Heights/Gaza, then they do have something that they're sorely lacking at the moment: the moral high ground.
If keeping the palestinian territories result in violence, and giving the territories away would result in violence, at least Israel could wash its hands and say that it has done everything in its capacity short of ceasing to exist (which no one would seriously expect it to do) in helping palestinians on to their feet.
That would significantly weaken the position (moral and otherwise) of many of the political organizations against israel in the region, improve world opinion of israel, and give israel the authority to properly defend itself.
We did that. Gaza, remember? Israel's top military officers warned against it, that Gaza would become a breeding ground for terrorism, that we'd see Kassams falling on Askhelon and other cities. But we went ahead anyway, and whaddya know? It became a breeding ground for terrorism and Kassams started falling on Ashkelon and other cities. Sur-freakin-prise!

Call Gaza a trial run. We - and the rest of the world, if you'd bother to notice - saw what happens when you let them have free reign. Hell, HAMAS, the organization that had been denounced world-wide as a terrorist organization, was democratically voted into power. Hel-loooo?
As for a solution to the problem:
Everyone here was talking about the American war in Iraq (and against Terrorism on the whole) only feeding the potential threats down the road. How for every terrorist you kill, 2 will rise from the collateral damage you cause. Israel is not some kind of magical exception.
Agreed. But history also proves that when you strike and eliminate terrorism hotspots, such as the various explosives labs in Jenin, the attacks are reduced drastically. On the other hand, giving in to their desires (Gaza) just spawns more attacks.
If they would undertake serious humanitarian initiatives in the occupied territories, and showed the palestinian people that Israel was not out for their total annihilation or subjugation. Increasing the quality of life in the territories will give people a future, and give them something to lose. Reminds me of an old addage: "A man who has nothing to give can still give his life."
After all, how do you think entities such as Hamas and Hezbollah became so popular in their respected territories?
I could not agree with you more. It's a damned shame that Arafat festered away so much funding meant for the people into his own coffers for so long. Their standard of living is horrifically low. I cannot imagine being in their shoes. If there were any sort of way to guarantee a significant flow of funding into improving the quality of life for the Palestinians without aiding terrorism (i.e. the huge monetary rewards families of suicide bombers get from Hamas, Islamic Jihad, etc. don't quite count), I'd be all for it.
The UN doesn't have the military force and backing to put a military halt to this conflict; perhaps they should focus on the logistical side of the Palestinians. On sending construction forces to improve their cities, sending cleanup crews to get rid of all the junk Arab villiages are littered with, on sending teachers to give lessons in advanced farming methods, agriculture, etc.
Firstly, we all know Israel can't end the Hezbollah threat with military might; to repeat a phrase used by a British officer about the Taliban it's like 'punching water'. no matter how hard you hit, it'll always ripple back. And that's something proven right many times through history.
Just like our invasion of Jenin in 2002 didn't cause any sort of noticable plunge in terrorist acts immediately afterward, right? Yeah.

And on top of that, the bombing of South Lebanon is scarcely going to dull any anger against Israel, is it? It's only going to strengthen Hezbollah, because we've seen time and time again that bombing campaigns force populations to band together rather than demoralise; the famous 'blitz spirit', for example. Sure, there are other ethnic religious groups that want rid of Hezbollah - but they always did. And all this is doing is weakening any possibility - if not already removed - for peaceful disarmament.
In case you failed to notice, we were perfectly willing to wait Southern Lebanon out for 6 years. Wait for the situation to improve, for Hezbollah to perhaps lose moral standing in Lebanon because "Hey, Israel's not in Lebanon anymore!" But nothing changed, and then they started rocketing our towns and cities. F*** that. They had a chance at peace, at normalizing the situation. They want to screw with us? They'll learn that there's a heavy price to pay.
And yes, paying that price will generate more hatred of us. More Hezbollah recruitees. More anti-Israel sentiment. We can only hope that somewhere down the line, the blind and ignorant bleeding-hearts will get slapped in the face by someone with their eyes open to what's been happening, and realize that being "nice" doesn't fracking
work with the Arab mindset - especially not when when fueled by the Islamic "First the saturday people, then the sunday people" way of thinking. They want us dead. They want
you dead, too. I don't plan on giving in to those desires.
ANYway.
The reason I returned to this thread was actually to post the following link - apparently this site takes the daily news from Israel, dubs it over in English, and puts it online. My parents told me about it (they've been overseas for the past month and a half), since it's been a primary way for them to watch Israeli news from overseas.
http://www.jerusalemonline.co.il/home.asp