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...that you should cease to exist.
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That's a thing of the past. The general consensus in the Arab world is that if Israel pulls back behind the 1967 borders, a lasting peace can be reached.
Re terrorist, depends on which side you are. Ones freedom fighter is the others terrorist. Many of Israels Prime Ministers started their carreer as a terrorist.
Until now the policy of Israel is of military arrogance. The present war with Hizbollah will show if this arrogance is justified. Fighting with an asymetrical oppenent is quite different as to what they learn on West Point et all (as shown in Iraq).