DY,
1. Israel also has gun laws but they are much saner. First of all, those who live in certain areas can get licenses after passing firing range, background and psychological tests (the last must be redone every few years). Reserve IDF officers have an automatic right to a license. They are very common and have stopped terrorist attacks at the get-go.
2. The Arabs have their own factories. The Jews also had them during the Mandatory period. Carrying an illegal gun was a capital offense (and there were a few hangings) but that did not stop them as they were ready to die for their cause.