Israels attempts so portray the peace activists as terrorists have a huge flaw, which is apparently visible only outside of Israel. If these guys were terrorists, they would have had automatic weapons and hand grenades, not kitchen knives and metal bars. You don't take a knife to a gunfight.
Three Jews arrested in Damascus Gate in E. Jerusalem after attacking residents, police (Haaretz)
from the article: State Comptroller to probe Israel's raid on Gaza flotilla