I don't think that impression is right. Besides israel is strong the arabs are week, and the arabs are more likly to fight each other.
Besides you have to remember that close to a quarter of israel's population is arab, and most of that being muslim arab. Peace between the people is possible, its not a silly stoned hippy pipedream.
The liberal establishment in the US seems to be on your side. CBS news is trying to sow dissent in the IDF now about serving in the occupied territories. So we probably will see if you are right.