I was interested in participating in direct peace activism in Palestine. But the organization I will be working for and the majority of those I will be with are non-Muslims. Is it appropriate to participate in a secular peace initiative administered in the majority by Kuffar? Also some of the work involves monitoring and negotiating with Israeli soldiers (terrorists). One circumstance is that when Israeli search Palestinian homes they destroy the walls to enter adjacent homes. This causes great damage and could cause homes to collapse in the future, killing the inhabitants. The soldiers (terrorists) do this to avoid being targets of "sniper fire" which is in most cases a myth. What the international peace activists do is they volunteer to use themselves as human shields for the Israeli soldiers (terrorists) during these operations to prevent destruction of Palestinian homes. Is this sort of action permissible?

Praise be to Allah, the Lord of the World; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.

Israel is at war with Muslims. It takes their lands by force and kicks them (Muslim) out. Israel adopts the cruelest methods in these operations. As you mentioned they destroy houses on the pretext that snipers are there.
In fact, Zionist enemies spare no effort to expel Palestinians from their houses even without such pretexts.
So, it becomes obligatory for every Muslim, especially those who live in Palestine to wage Jihad by every means against the Zionist occupation and aggression.
Allah Says (interpretation of meaning): {And fight in the Way of Allâh those who fight you, but transgress not the limits. Truly, Allâh likes not the transgressors. [This Verse is the first one that was revealed in connection with Jihâd, but it was supplemented by another (V.9:36)]. And kill them wherever you find them, and turn them out from where they have turned you out. …} [2: 190-191].
Here, we state that each and every effort, in word or in deed, that helps Muslims to resist such wicked entity (i.e. Israel) and to prevent harming them is, for sure, a kind of Jihad in the cause of Allah.
Allah Says (interpretation of meaning): {…, nor they take any step to raise the anger of disbelievers nor inflict any injury upon an enemy but is written to their credit …} [9: 120].
Based on the above, we say that any kind of participation that helps Muslims to regain their rights or to protect themselves and their property, constitutes a form of Jihad that will be rewarded in the Hereafter, Insha Allah.
In addition, there is no harm in participating with non-Muslims as long as such participation is beneficial for Muslims and harmful to their enemies. Also, it is permitted to seize houses and to use them as a means to prevent enemies from destroying them.
Allah knows best.