Suicide bombing (homicide bombing) a pool hall is wrong.

It seems that you are saying that the Palestinains are free to shrug off their humanity and use this tactic because they are outgunned by the Jews and this is the only apparent tactic that will give them a chance to prevail.

If this is true then I suppose the Jews would be justified in upping the ante to exterminating every last Palestinian, since that is a tactic that will provide certain victory.

Doesn't being civilized mean that sometimes certain things cannot be justified and negotiation, losing, surrendering or accepting humiliation, if neccessary, becomes the only reasonable option?

You pick the attrocity. building settlements, raids or whatever vs. suicide bombing. It makes no difference which side you choose. If one thing is a logical and acceptable progression to the other then extermination becomes a valid option for either side at some point.