As I understand it, the dispute is regarding the format of the tribute rather than whether there should be one. Apparently the Israelis wanted a minute (not just a moment) of silence dedicated to them solely, rather than one also paying tribute to other victims of terror at the Olympics. The demand is also that it be held during the opening ceremony rather than the closing ceremony or some other ceremony.
I suppose the IOC is also cognisant that the Israelis will want the tribute repeated at regular intervals (60 years, 80 years, etc).
I concede that the IOC aren't very principled at the best of times but it may be a case of escalating demands on the part of the Israelis that can never be satisfied.
I would support a moment of silence, and obviously there should be one, but perhaps it should be on the basis that the matter is thereby resolved, and that the Israelis won't be demanding further tributes at each subsequent games thereafter.