That's the question that some opponents of Israeli military action are asking defenders of this action. In fact, I've been asked this question directly more than once. The idea, obviously, is that given that the number of Palestinian noncombatants killed by Israel exceeds the number of Israeli noncombatants at immediate risk from Hamas rockets, to defend Israeli military action one must logically believe that Israeli lives are worth more than Palestinian lives.
The easy response to this is to argue that there will never be peace between the Palestinians and Israel so long as Hamas, with its fanatical anti-Israel views and violent agenda, is allowed to act unmolested in Gaza. In the long-run, by creating the conditions for peace or at least quiet, the number of noncombatants saved in both Israel and Gaza by current Israeli military action will dwarf the short-term costs.
But that's the easy way out. Let's tackle the harder question, of whether Israel is required to, or even should, treat Palestinian noncombatants as equally valuable to its own noncombatant citizens. Let's say, for example, that the Israeli government's best guess is that military action will cost the lives of 1,000 Gazan civilians, but save the lives of 400 Israelis. (And let's assume arguendo that Hamas and not Israel is the "aggressor," so we can take off the table the argument that Israel doesn't have ANY right to engage in a military response.)
We have to start, I think, with a broader question. Are governments, in general, expected to act as if individuals who are outside their jurisdiction are "equally valuable" to their own citizens? The answer is clearly no. In practice, no government acts this way. Governments provide military protection, police protection, a justice system, food, shelter, medical care, etc., to their own citizens, especially poor citizens, and give little to the citizens of other countries, even when those citizens are far worse off on average. The most "Progressive" countries in the world, the Scandinavians, devote something like 2% of their budgets to their total foreign aid budgets to help billions of poor around the world, a figure obviously dwarfed by the money spent on helping their own small, well-to-do populations. Children are starving in Sudan and Bangladesh so an elderly Norwegian can enjoy a rejuvenating week at the spa paid for by his government! Aren't Sudanese and Bangladeshi lives worth more than the temporary comfort of a retired Norwegian?
Relatedly, no country in the world has open borders. The blessings of American citizenship, for example, are available only to a select few hundred million, and the rest of the world is treated as if they are "less valuable" by our government.
This goes to the basic heart of the implicit social contract between government and its citizens in a democratic society. The citizens pay taxes and obey government dictates, and in return the government fulfills its obligations to them. Protection from foreign enemies is among the most basic functions of government. Any government that fails to engage in such protection because it believes that noncombatants on the other side are equally valuable to its own noncombatants would be violating that social contract, as well as acting contrary to the actions of every government in human history.
In protecting its own citizens, a government still should take moral considerations into account. That's the point of conventions and treaties on war, treatment of prisoners, etc. But even under the most generous interpretations of international law, there is no such established principle as the critics of Israel are asserting. Indeed, the establishment of such a principle would not only prevent states from engaging in the expected defense of their citizens, it would undermine the entire concept of the nation-state, which is premised on the idea that nations have fundamental duties to their own citizens that do not extend to citizens of other states. One can argue that the whole idea of nation-states is misbegotten and immoral, and in my libertarian heart and mind I tend to agree. But that's not the world we live in, and, even if that's one's preferred world, there is no particular reason to expect Israel to be the first and only nation-state to abdicate its sovereign responsibilities. Put another way, the Scandinavians could justly criticize Israel for not having "proportionate" civilian casualties as soon as they establish an open immigration policy for residents of impoverished Third World nations.
In the absence of relevant treaties, exactly where the moral line should be drawn in causing noncombatant civilans casualties in protecting a country's own citizens is a very interesting question, one that was debated on this blog back in 2006 (I can't find the link right now). I don't remember coming to any firm conclusion then, but I'm quite sure the answer isn't that the ratio has to be one to one.
So yes, as a matter of abstract morality, Israeli lives are worth the same as Palestinian lives which are worth the same as Iranian lives which are worth the same as Mexican lives and so forth and so on. But that question obfuscates more than it illuminates. The real question is, is it either realistic or even desireable to expect nation-states to act as if their own citizens' lives are no more valuable than the lives of citizens of other countries. If the answer to both questions is yes, the argument of Israel's critics is really an argument to abolish the nation-state as it currently exists, which makes the argument rather superfluous to the specifics of the fighting in Gaza.