Completely false argument. If an enemy moves civilians into an authentic military target, it is licit to attack it because it is still a valid target. Targeting something which is not a valid military target because it kills enemy civilians is completely illicit. So is killing an innocent person because he may be an enemy in the future.
Clashes between IDF and protesters in Bethlehem and East Jerusalem (Reuters)
from the article: Police release rabbi arrested for inciting to kill non-Jews