Sorry, but for a conflict to stop and peace to succeed, BOTH SIDES must have the impression they won.
That is why negotiations must take place.
What can very well be done is to draw a distinction between the country and the faction that is responsible for the conflict. That way, the one who seems to have lost , hasn't really lost because he wasn't part of the provocation.
Terrorists who commit suicide, do so because it's the only way they feel being honored. The matter for the israelis is to give enough dignity back to the palestinians. Otherwise, nobody will ever win in the Middle East.