It's interesting that we don't count Israel as a religious lunatic state.

Israel's stated goal is not to kill unlike Hamas

Best to watch what people do rather than what they say.

Which one consistantly has the greater body count, which one has been steadily illegally encroaching on territory, etc.

Sure, not their "stated goal", but remember that Hamas is a reactive organisation. There would be no Hamas without Israel.

I don't think there is a solution other than diplomacy as long as there are people who gain material benefit from war. Even nuking all Palestinians would not finish Hamas or its derivatives.

Almost all regimes in the Middle East (and even other Arab regimes) are having a very well relationship with Israel, even those who do not publicly do normalization of relations. Historically Israel (as well as the US.) supported these regimes to ensure its interest. Not many books written about that so far, but I recommend people to check William Blum's "Killing Hope", it studies a very similar case of supporting dictatorships by Israel's key sponsor (the United States).