Your idea that Israel doesn't engage in terrorism is shockingly misinformed.
"...[T]he Zionist state remains the cause of more regional grievance and sheer terror than all the Muslim states combined. Read the melancholy Palestinian Monitor on the Internet; it chronicles the equivalent of Madrid's horror week after week, month after month, in occupied Palestine. No front pages in the West acknowledge this enduring bloodbath, let alone mourn its victims. Moreover, the Israeli army, a terrorist organisation by any reasonable measure, is protected and rewarded in the west." 
John Pilger, antiwar.com 2004
 
"...[Y]ou are supposed to believe that nineteen missiles fired in a refugee camp crowded with women and children is not an act of terrorism, it is anti-terrorism. 'No matter how many shattered bodies of Palestinian men, women and children pile up, please understand that Israel is not a terrorist state.' You are not supposed to worry about the fact that Israel’s leader, Ariel Sharon, is a war criminal who slaughtered 1,500 Palestinian men women and children in Sabre and Shatila.
David Duke, PhD, Former US Representative (R-LA), in a Nov. 18, 2002 DavidDuke.com website article titled "What Is Anti-Semitism?," wrote:
You are supposed to believe that firing missiles from the relative safety of fighter jet or an armored helicopter gunship or tank into Palestinian buildings, refugee camps, neighborhoods is not terrorism! However, when a Palestinian suicide bomber sacrifices his life to strike at Israelis, that’s definitely terrorism. Have you got the picture now?"