Muslims have hated Jews long before Israel was established.They slaughtered Jews in Hebron in 1929 and Jaffa in 1920 for no other reason than they were Jewish, so the hate started way before.The Arabs have hated the Jews way way back and it has gotten worse.The latest poll shows 97 percent of the Palestinians hate them, so tell me how can you change it? They offered them back land for peace numerous times and got suicide bombers as an answer.
They should be punished, but remember the teaching of the the Pentateuch, Deuteronomy 32:35 : "To me belongeth vengeance and recompence; their foot shall slide in due time: for the day of their calamity is at hand, and the things that shall come upon them make haste." God who is Holy and perfect will repay the enemies of Israel far more than what we can think of doing. This will be true and perfect justice.
Tzahal troops are trained to shoot the foot (optimal) or leg. By not going lethal, they now have someone who can be 'asked questions' by Mossad or Shin Bet. Information gathering is severely limited with a dead terrorist.