The direct problem isn’t that the other side has a different religion, it’s that the other side essentially has competing land claims, and a competing nationalist vision.
Right.
But those nationalist visions aren’t entirely secular in origin. For both Hamas and religious zionists, they’re rooted in their religion.
This isn’t religiously motivated violence the same way that the Spanish Inquisition was. But religion is pretty deeply baked into the conflict, in some very important ways.