I think your last paragraph hit the nail on the head: it's hard, if not impossible, to sell bad policies. If our policies are antagonizing people around the world, you could quadrulpe the public diplomacy budget and still be unable to improve our image abroad. There is no amount of money that can counteract the harm that the Iraq invasion did to our reputation around the world.

During the month long battle between Hezbollah and Israeli Defense Forces it was widely reported that Israel had used cluster bombs. The media has recently picked up on a preliminary report by the State Department investigating whether Israel had violated terms not to use cluster bombs on non-military targets. It is important not to understate the impact that such an incident has on our image.

The cluster bombs used intentionally to kill Hezbollah militants, but instead killed Lebanese civilians reverberate through the Arab street as a preventable tragedy. The fact that it took place in Qana, a village which had experienced an even worse attack, where over 200 Lebanese were killed in 1996, only adds fuel to the fire. Robert Fisk a British reporter from The Independent described the 1996 attack as a “massacre.�

Fisk went on to write that “Israel’s slaughter of civilians in this terrible 10-day offensive-206 by last night-has been so cavalier, so ferocious, that not a Lebanese will forgive this massacre.�

While one might suggest that these are accidents, and the Israeli government clearly does not intend to engage in such rogue-like behavior, the United States government cannot afford to be indirectly attached to further accidents. For too long, we have turned the other cheek regarding Israeli aggression. If the United States wishes to get serious about improving our image amongst Arabs in order to curtail the recruitment tools used by terrorist organizations, it should use its financial leverage.

The United States government should temporarily halt its military support of Israel. Note that this would be temporary. By imposing a significant punishment to the Israeli government the US would be sending an important message that the US will no longer continue to support attacks by the IDF on civilian targets, even if it may be unintentional. Thus, providing a coherent policy in which we condemn terrorist attacks on civilians and military attacks on civilians.

Such an action would be a radical shift considering our long standing support, economically and militarily, of Israel. Such a change in policy may be needed if we are to ever improve our image overseas.

The main proposition of the preceding post is as follows:

"The United States government should temporarily halt its military support of Israel... by imposing a significant punishment to the Israeli government" to send "an important message that the US will no longer continue to support attacks by the IDF on civilian targets, even if it may be unintentional" for the purpose of "improving our image amongst Arabs in order to curtail the recruitment tools used by terrorist organizations."

I think there are assumptions here which require additional scrutiny, and some arguments that call out for rebuttal.

(1) U.S. support for Israel is not the same as support for killing civilians. All militaries inflict civilian casualties unintentionally, and while tragic, that cannot dictate foreign policy. The United States and Israel take extraordinary precautions in most situations to avoid civilian causalities, but in protracted urban warfare against insurgents and terrorists who deliberately place civilians at risk, tragedies happen. Mistakes are made, and there are dreadful consequences, which must be addressed. But a zero tolerance policy on even unintentional casualties is far-fetched. This policy requires Israeli leaders to place a higher value on the lives of the civilians of other countries than on protecting their fellow countrymen. The U.S. does not expect any of our allies to apply this impossible standard to us, nor do we apply it to any other country. None of Israel's adversaries adhere to anything remotely close to this standard. No country has ever been held to such a standard, so why should Israel, whose civilians are deliberately targeted every day, be held to it?

(2) It is dubious that there is any action at all the United States could take to penalize Israel that would persuade Arabs that the United States is not biased toward Israel. If an American fighter plane bombed Tel Aviv, millions of people in the Arab world would sooner believe it was part of a conspiracy than a genuine shift in U.S. policy. While this reversal might show temporary inconsistency and confusion, it is doubtful it would have an appreciable impact on our "image."

(3) Those Arabs least likely to be persuaded by the United States adopting a punitive policy toward Israel are the most radical extremists who are using U.S. support for Israel as a "recruitment tool." These ideologues already choose not to root their arguments in fact, but fabricate propaganda. Would they stop now? No. If the U.S. stopped supporting Israel, they’d deny it or invent another reason to attack us.

(4) Surely many moderates would understand this act of realpolitik, but they are not the people who are becoming terrorists. It might however, encourage some of Israel’s neighbors that were formerly deterred from aggressive behavior towards Israel by its strong support from the United States. Perhaps a country like Syria or Iran would re-calculate the costs and benefits of antagonizing Israel if U.S. credibility were scuttled. This uncertainty could certainly spark a crisis in the region in which the U.S. would have to intervene and surely thousands of civilians would be a risk.

(5) Israelis would also no doubt get the message that American support for one of its oldest and strongest allies was wavering, and that there security position was once again as precarious as it was in 1973. This isolation would have the exact opposite effect of curtailing Israel’s military stance. The more insecure Israelis feel, the more casualties they will inflict in their effort to protect themselves, and the more Arab civilians die, the more the United States will be blamed, according to the foregoing argument, anyway.

Every peace deal the Israelis have made -- with Egypt, Jordan, and proposed deals with Syria, every one -- involve the U.S. guaranteeing Israeli security. Cutting off military aid to Israel puts those deals in jeopardy. American military support for Israel -- and its generous support for Egypt, Jordan, and Saudi Arabia as well -- is what promotes peace and security in the Middle East, not what destabilizes it.

(6) So this "temporary" halting of aid, how temporary would it be? And when would aid resume, under this plan? 30 days? 6 months? 5 years? The more temporary the policy, the less impact it will have, because the less resolve it would signal. At the point it has little impact, why even do it? Would the U.S. resume military aid only when terrorists stopped using U.S. support for Israel as a recruiting tool? Well then terrorists would have an incentive to target the United States even more. Would the U.S. resume aid once Israel promised not to unintentionally kill civilians? I believe they already do not intend to unintentionally kill civilians.

(7) Support for Israel, perhaps second only to opposition to the Soviet Union, is one of the core bipartisan principles of U.S. foreign policy since WWII. Congress and the American public would reject any plan to cut off all military support to Israel. Even if a President wanted to adopt this course of action, which would be in breach of U.S. treaty obligations, it would be wildly unpopular, and contrary to the will of the public.

(8) Israel's military and economy are so strong, it could defend itself without American military support. Contrary to what many believe, both in the United States and the Arab World, Israel is fairly independent and will not easily allow its democratically elected leaders to be blackmailed by the United States. It’s not at all clear cutting off military aid to Israel would reduce the number of civilian casualties. The only certain way to end civilian casualties on both sides is for the terrorism to stop

(9) Tying military support to our allies to a total absence of collateral damage will create perverse incentives to increase the already rampant practice of using human shields, positioning military targets among civilian populations, and generally using the conscience and laws of the West as asymmetrical political weapons. If we show Hezbollah and Hamas that they can cut off American military support by boosting the number of civilian casualties, they might as well just blow up Lebanese civilians themselves. They're a much easier target than Israeli soldiers, or even Israeli civilians.

(10) In the machtpolitik of strong man politics throughout the Middle East, power, resolve and credibility are the only currencies. If you are weak, you are vulnerable. If you are unpredictable, you invite trouble. Reversing a core principle of one’s policy temporarily will dramatically weaken the bargaining position of the United States in any future negotiations for a comprehensive settlement, and would undermine U.S. credibility in China, North Korea, Iran, Sudan, or anywhere that it expects to be taken seriously. Giving away the largest imaginable concession to the Arab countries in exchange for absolutely nothing while simultaneously removing America’s only leverage over the Israelis, would be a diplomatic blunder of which even Neville Chamberlain would be incapable.

There is no question that terrorists target the United States because the U.S. supports Israel. There are also radicals, extremists, militants and murderers in all corners of the world who hate United States not for its support for Israel, but for its similarity to Israel as a powerful, prosperous, capitalist, democratic, secular, free society. And undoubtedly this cycle of hatred and violence has provoked all sides to do unspeakable acts to one another, further fueling war and misery. This cycle can and must be broken. But to suggest that in this confrontation, the United States should join the terrorists' camp in condemnation of one of its oldest allies, and actually withdraw all our support, even temporarily, thereby aiding the very enemies we oppose, seems to me to be a mistake. And if our primary motivation is only to try and improve our "image," as a political ploy, that seems like a policy which is not merely counter-productive, but immoral.

Prime Minister Ehud Olmert admitted to the Winograd Commission that the use of cluster bombs in Qana, which killed over 50 civilians, damaged Israel’s ability to swiftly reach a diplomatic resolution. 

Olmert testified to the commission that "the fact is, if Qana hadn’t happened, there is good reason to believe that we would have been in a very good position to complete the process." 

 Here is the full article titled "Israel’s Bombing of Civilians Extended War, Olmert Told Panel"