It's totally true that killing civilians means you radicalize all their family and friends.

In 2006, the newly elected Hamas government actually stepped down during a negotiated cease fire and agreed to a unity government.

Then the Israelis accidentally (at least according to their statements) bombed a residential building, killing 24 civilians including children and injuring many more.

That's when the Hamas took back the government (some would point out, illegally, since there was no official election after they stepped down) and resumed the attacks on Israel.

But all in all, it's a prisoner's dilemma situation. The current situation sucks, but for both sides it would probably be worse, at least in short-term, to unilaterally reduce aggressions without the other side doing the same.

Understandably (after all this bloodshed over such a long period), there are quite a few people on both sides who will stop at nothing short but the eradication of the other side. That's not exactly a viable basis for negotiations.

And with every attack, every uprising, every repression and every civilian killed, this gets worse.