The claims made about the ISM here are untrue, The Israeli army claimed at one time, to have found a gun in an ISM office, but later retracted that claim. The only "link" to terrorism that has been suggested is the fact that two British nationals attended a public vigil for Rachel Corrie and then later blew themselves up in a bar in Tel Aviv. They had no connections to the ISM. Blaming the ISM for this would be like blaming everyone at a demonstration in SF, if two people who attended later blew themselves up in a club in SF. If the Israeli government had any real belief or evidence that the ISM had ANY connections to terrorism, they would have them all removed and prosecuted.
The ISM does state that they recognize the right to legitimate armed resistance, by legitimate, they mean legal. Under international law an occupied people has the right to legitimate armed struggle, which is attacks on military targets, not civilians. In fact the ISM is opposed to suicide bombings and states so on their website www.palsolidarity.org. Furthermore, though they state that they recognize the right of legitimate armed resistance, they state that they are committed to nonviolent resistance.