At this point I need to ask for clarification of your numbers. Where do you get the "99% of the violence" number? Is it a real number, or one that you believe is correct but have not verified?
For me, that number does not seem believable. For example, in 2007 there were 2,796 calls to the Rape Crisis Hotline concerning "Rape, attempted rape, Statutory rape", 386 for "Gang rape and sexual attacks", and 1,630 for incest. I suspect the same is true today, but I have not found more recent numbers.
It's very unlikely that incest is caused by an Israeli vs. a non-Israeli, but perhaps you don't regard that as violent. Do you regard rape as violent? I certainly do. Are 99% of those rape reports caused by non-Israelis? Or are they made up for by very large amounts of violence elsewhere?
I looked also for domestic violence reports, but that was hard to come by. From what I gather, it is poorly and infrequently reported, and criminal proceedings can take years to prosecute which discourages women from doing so. The UNHCR says "11 percent of the 688 women admitted to battered women's shelters in 2005 were Ethiopian (Haaretz 23 Aug. 2006). In addition, approximately one quarter of Israeli women murdered by their husbands in recent years have been Ethiopian."
688*0.11% = 75, so there must be at least another 7500 cases of Arab violence towards Israelis for your 99% number to be true.
More realistically, I think this sort of violence isn't something you think much about. http://columbiacurrent.org/2010/04/conspiracies-of-silence-v... writes pretty clearly on how this is talked about even less in Israel than in the US.
For Palestinian women, it's even worse, but my goal here was to question how you determined the 99% number.
I put "terror attack" in quotes for precisely the reason you described - it is ill-defined. One definition says "the use of violent acts to frighten the people in an area as a way of trying to achieve a political goal." Another definition says that attacks on military cannot be considered terrorists. Yet another says that if the main goal is to get money then it is likely not terrorism.
This is why I would rather use the term "violence" than the term "terror attack" and when you ask "What terrorist attacks?" I would rather refer to settler attacks like the one I found in Haaretz titled "Settlers attack Palestinians to avenge West Bank outpost demolition", which seems to fit your definition of "mass psychological damage", if only to a single town.
I found these http://old.btselem.org/statistics/english/Casualties.asp statistics. Various source question what "civilian" means, but it's enough basis for this discussion. It lists that 53 Palestinians were killed by Israeli civilians in Israel and the Occupied Territories, while 254 Israeli civilians were killed by Palestinians (over a 12 year period). This is not 99%.
I noticed that you switched from talking about Israelis to talking about "Israel". Why is that? I easily found cases where a Palestinian was "shot and killed by settlers while harvesting his olives", and "killed by settlers who rioted in Hebron"; isn't that the topic we were on, and not state policy? But it is not hard to find other cases of Israelis instigating an attack even while Israel protects the Palestinians.
I see that you then switched the topic to "Egypt"; I thought you were using "Arab" as the term for non-Israeli people living either in Israel or the Occupied Territories, and that is how I meant to use it. If you want to include Egyptians in this category then surely this category is getting rather nebulous. How many Egyptians have served in the Knesset? What percentage of violence is committed against Israelis by Egyptians?
With your new definition, then certainly it's true that more Arabs are killed by other Arabs than Arabs by Israelis because there are some 300+ million Arabs in the world and only some 7.6 million Israelis. Would you clarify what you mean by "Arab" in this context?