Deterence worked with the former Soviet Union because the leadership didn't want to die. Their government was idiocy on parade but the men who were in charge weren't completely irrational. Deterence isn't nearly as effective with people who believe that dying while killing infidels gives them an express ticket to whorehouse heaven. You're making the mistake of believing that everyone is just like us, only with funny accents. The Islamic radicals out there* aren't interested in making peace with you. They want you to be subjugated to their religion, and failing that, they want you dead. Not much room for compromise or negotiation there, IMO.

*There are a reported 1.2 billion Moslems alive today. If even 0.1% of them are the radicals I'm talking about, you're talking about 1.2 million people, about the same as the number of people on active duty in the US military.