"Israel is like a trained martial artist vs a kid yelling "I'm going to kick your ass!". The proper response to that is to ignore it, because it is not a viable threat, not to brutalise the kid into the hospital."
Given the existence of riots where large rocks are being thrown at Israeli soldiers, what are they supposed to do? Ignore it? To return to your parallel, if the kid is about to do serious damage to trained martial artist's knee, he's got to respond.
Somewhere deep in your personal creed are the beliefs:
1) There must be a solution to all problems
2) People of other cultures are ultimately reasonable and will 'play nicely' if only given the chance.
In practice the Middle East demonstrates these are fantasies; the failure of the Arabs to be willing to engage in peace negotiations before 1967 and their continuing use of the refugees as a weapon against Israel reflect a pathological ideology - probably from Islam - that allows no compromise. By contrast Israel has not gone on and on about those whom it accepted as refugees from the ethnic cleansing of Arab countries after their defeat in 1948, a number remarkably similar to the number of those Arabs who were, for whatever reason, no longer resident within the ceasefire lines of 1948.