Amos Elon writes about the other group of religiously motivated fanatics living on the West Bank:

The political power of the settlers has long been a major factor in the continuing crisis. The settlers now make up Israel's most vociferous political lobby. Military deployments on the West Bank and in the Gaza Strip are nowadays largely determined by their interests and personal wishes. For years they have vehemently opposed every peace initiative and blocked every possible compromise. When Yitzhak Rabin became the only prime minister to seriously stand up to them, they launched a vicious personal campaign against him and he was subsequently murdered by one of their ardent supporters. The militant groups that sympathized with the murder are now vociferously demanding the prosecution for treason of the "Oslo criminals"?i.e., the two academics who negotiated the Oslo agreements and former justice minister Yossi Beilin, who sponsored their mission.

Despite the assassination, there is still no moral equivalence between any of that and the raving bloodlust of the radical Palestinian elements (desperate to kill themselves if they can only take a few Jews with them). But you don't have to argue for that equivalence to say that actions on behalf of the settlers are an obstacle to peace:

Since Sharon came to power, thirty-four new settlements have been established. More land has been expropriated to build roads that bypassed Palestinian towns and villages and were closed to Palestinian traffic, thus enabling the settlers to commute back and forth to Israel without setting eyes on a single Palestinian.

If this stuff actually formed part of some effective strategy against the suicide bombers, you could certainly justify it on those grounds alone. But the expropriation of West Bank land, and the bulldozing of Arab houses, have done nothing to restrain them, and just fueled their rage. Maybe it does feel good to hit back --- but that is the logic of the suicide bombers as well.