I have no problems with the idea of the right of Israeli self defense.
The problem with that is that West Bank and Gaza are not actual states. To chalk it all up to a nation's right to self defense is to pretend that what you have there is a situation where there are two equivalent states, which there aren't.
Israel controls the borders, commerce, zoning, even water wells and so on. It has carved out multiple sections of the territory for itself, and has created a de facto apartheid state, where Israelis can drive around the West Bank in modern highways and to as they please, but Palestinians can't. A situation where any Jew around the world can become a citizen, but no Palestinian ever can, even if they are married to a Israeli. A situation where Israeli incursions are not a breach of cease fires, but any Palestinian action is. When you control a territory that much, when you destroy the state infrastructure in that territory that much,, then the "self defense" analogy is inherently flawed. A better analogy would be Spain bombing Bilbao any time the ETA did a terrorist attack. You can't simply occupy a region and act as its de fact state, and then when it suits you treat it like a foreign country and indiscriminately bomb it.
By the way:
Is Peace Out Of Reach? Video - CBSNews.com
Putting 500k settlers on West Bank is certainly not for self defense.