Is that so? You think the Palestinians live in a prison?
I think you should consider that most of the portion of money devoted to military goes to the training and supplying of the navy, the air force, the intelligence, the artillery corps, and the infantry. Apart from a few separate incursions and a small number of air strikes against known terrorist targets, very few military actions have been taken in the last few years against the Palestinians in the west bank and Gaza. Notice that what you hear about in the news is sometimes the cutting of power, sometimes misbehavior of troops at roadblocks, and very very seldom the kind of attack I mentioned above.
I think you should consider that Israel is a proclaimed ally of the USA, smack in the middle between Arab forces - Syria, Lebanon, Saudi Arabia, and to a lesser extent Egypt, Iraq and Jordan; and it's very close to Iran.
Most of the cash given is routed to be prepared for battle against these forces. How would the USA look, or feel, should the battle begin and Israel would be unprepared due to lack of resources (and contrary to popular belief, Israel is not a rich country)?
Killing Muslims for the sake of killing Muslims was never, is not, and will never be on Israel's agenda. Over one fifth of Israel's citizens is Muslim (and that's quite an electoral power, if nothing else). Israel's sole care is eliminating terror - and terrorists, protecting its population.
Why aren't you asking where the
$7.4bn given to the Palestinians went?