There are two points:
1) Creating terror is the main motivation for terrorism; if the victims stop being terrorized, the motivation for the terrorists to further the bloodshed will be reduced if not eliminated. Also, what the society has been doing to stop terrorism is to create more of it for the other side, which in turns creates more on this side, hence the spiral.
2) The victims cannot stop bloodshed but we can stop the terror. So if we can solve one of our problems ourselves we should do it. I think the mental and psychological anguish is much troublesome ( and more widespread) than the physical affects.