Israel would not want to deter rocket attacks if it meant that the energy used to arrange rocket attacks was shifted to suicide bombs or something even worse. The underlying reality of the conflict is that there will always be tactics that cannot be deterred. Ideally a point is reached where both sides have what they want (a country) and hostility takes the form of sports. Until then, the problem is the Israeli view that a conquered and subjugated population can be indefinitely controlled and manipulated.
from the article: The policy of deterrence failed on Hamas and Islamic Jihad