I don't agree with Israeli policy either, but the major difference is that they aren't actually targeting civilians. Understandably, civilians do die, and it is a fine ethical line that I happen to think still falls on the side of unethical.

The Palestinians could try something that has a history of actually working, like passive resistance. Imagine if ten or twenty Palestinians lay in front of an Israeli bulldozer, or a tank, and invited the media... Then who's the victim? Then there is no ethical question. The Palestinians seem quite willing to throw away their lives, so why not do it in a more media-friendly fashion? Why not take the moral high ground?

Or, if that seems unreasonable for any reason at all, they could use the money for a bomb belt to buy traditional weapons. At least that way, they'd be on the same level.

Personally, I believe that all violence is wrong unless you or your property is in immediate danger. If a Palestinian walks into a cafe and blows himself up, there is no immediate danger. It's just a revenge trip. Granted, what the Israelis do isn't much better, but "look what they're doing!" should never be a reason to refrain from attempting to improve the situation.