The Chechen terrorists seem to have a political goal that may or may not be noble, but their tactics clearly indicate that they are terrorists and not patriots, freedom fighters, or whatever. Killing all those kids, the civilians on the airliners, etc... is just the wrong way to go about achieving any goal.
The Israelis have shown many times over that they would like to live in peace with their Arab neighbors, but that doesn't seem to true of the Arabs. The hatred and sub-human loathing of the Jews by the Arabs is unfathomable to me and will always be an insurmountable obstacle to any peaceful resolution. I think it is a waste of time for the Israelis to negotiate with such enemies. They can put up that wall, defend themselves and launch retaliatory attacks forever - or get the hell out of there - but those seem to be the only options.
Personally, I don't see the allure of living in the Middle East, but whatever... Maybe the Israelis should all pack up and move to Baja, build replicas of the holy sites, and turn it into a beautiful country. Mexico ain't doing much with all that prime real estate.