I think it could be rephrased to "there will be peace in our world when we start loving our children more than we hate our neigbours"

Ahhh but it was not phrased that way.

In the actual quote, there is accusation and blame that Palestine is at fault. An Israeli implication that Palestine prefers hating Israel to loving it's own children.

There is nothing in that statement that encourages peace or understanding. It is a threat.

We will let you have peace when we are satisfied that you do not hate us. We will stop killing your children when we are satisfied that you do not hate us.

What proof of satisfaction? That Paelstinians move out of the land. Israelis want it and they do not want it polluted by Palestines and their different culture and oh so wrong religion.

That is all it boils down to.