Such insensitive words are quite shocking from a country which itself has faced the heat of Islamic terrorism for many years. Of course, this is not the Israeli Government (or the caretaker government) that has said this. Indeed, foreign minister Tzipi Livni seemed far more clear in her thought.
Random accusations of collateral damage does not do well. The Indian Establishment might as well have let the terrorists kill all the Jews living there. But Indians are not like that: we don't have blind hatred towards Jews. India has welcomed all cultures and civilisations, and Jews, like other groups, are free to obtain education and jobs in India and also practise and propagate their faith.
I don't think the slain Rabbi and his wife would have been very happy had they known such allegations were being made against India's bravest warriors. They preached love and peace, and I respect Jews for that.