Because of propaganda directed at the West, by Al Qaida and Palestinian terrorist groups, it is easy for some of us (either because of wishful thinking or well-meaning humanistic ideals) to be convinced that terrorism is a desperate, pained response by the Muslims to real or perceived injustices. If somehow we could only redress these greivances, we could get to the root cause of terrorism. This is the standard narrative of the Left here in Israel and liberals in America. Never mind that there isn't any evidence for this being true, given our experience with terrorism (particularly that it INCREASES any time we make gestures, concessions, or attempt to make agreements).
For those of you who have any doubt about the matter, I advise you to read this. Basically, the author shows that propaganda directed to western liberal audiences (particularly the message that terrorism is punishment for Western misbehavior, and promises to stop if certain conditions are met) is psychological warfare, while in propaganda to Arabs no mention is made of Zionist or American crimes. Rather, the issue is the fundamental Muslim attitude towards the kufr, the non-believer.
These Muslims harbor resentment over their status of inferiority in relation to the western world. In any measurable sphere of human progress-- economic, scientific, technological, and political-- they are behind. The fact that the kufr is more powerful than them and not subservient is unacceptable in their theology. In their view the Quran commands them to fight the kufr until defeat or until they convert to Islam.
The Palestinian cause has been effectively hijacked by Islamicism. It is no longer about nationalism, because they could have had their Palestinian state along time ago. The Palestinian terrorists' narrative is that of unending Islamic resistance to the heretics and their control over "Islamic lands".
Our strategy is to utterly defeat them, or bring them to the point where they feel that their cause is hopeless.