Are we breeding more terrorists?

Maybe, no probably:

“History shows that it is rare that increasingly repressive measures by the regime in power have the desired effect of addressing the underlying sense of grievance. Instead, the issues must be confronted and the criminals arrested (or killed in the attempt—I also note that declaring “war on terrorism” may legitimize the nonjudicial killing of terrorist suspects as enemies engaged in combat). Israel is suffering from a predictable bloody backlash against its increasingly oppressive reaction to terrorist outrages within its borders as it seeks to target Al Fatah and other resistance or terrorist groups in Palestine. This repression often raises more extremists who are willing, even eager, to become martyrs in the perceived cause of their religion, country, or community. All repression must be avoided in the conduct of the 'war on terrorism.'”—Durie, War in the Bible and Terrorism in the Twenty-First Century, page 120