Israel doesn't respond because doing so means accepting that territory can not be annexed at the point of a gun. The regime chokes at that thought because their vision for the state is predicated upon future territorial self-aggrandisement e.g. East Jerusalem today, "Eretz Israel" tommorow, and up to the Litani River sometime down the track....
ISIS claims responsibility for bombing in Baghdad suburb; death toll hits 21 (Reuters)
from the article: After 8 years, why hasn't Israel responded to the Arab peace initiative?