You and falcon are not very wrong, Arab attackers receive different sentence than jewish attackers.
There's a lot of hypocrisy in here, yet a note must be taken:
The police is a body that calculates public reaction. They aren't actually thinking about what's right, but what will make them look good and cause less media mess towards them.
In a scenario where an Arab stabs 6 people in a parade, the officer that would shoot him down will be portrayed as a public hero, some kind of "justice bringer". Arab population in return would throw some stones, make some noise.
In a scenario where an ultra-Orthodox jew stabs 6 people and shot dead, the reaction would be deadlier. The Orthodox public is not only extremely ignorant, but also very united. If one of their guys is shot by the police (their enemy), it won't matter what he did - they would block entire streets and light them on fire. They'd also hunt for the policeman responsible.
Bottom line is, the police is a cowardly body, and hypocrisy rules our world.
Btw, i do not support shooting neither the arab or the orthodox.