As far as treatment of the dead goes, both Muslims and Jews have much the same beliefs. In the traditions, the body is washed and wrapped in white linen and buried within 24 hours if possible. For the most part, both traditions have frowned on "desecrating" the body for any reason, and for a long time organ donation was seen in that light. In Israel (at least when I lived there) there is a shortage of organs for transplants because of this and some doctors were arguing that organ donation was
not a "desecration", and were trying to encourage organ donation. But at the time they were still swimming upstream, culturally speaking.
However, in Judaism, there is also the notion that one should always choose life, to the point where Rabbis have determined that if there is a life-saving vaccine that is derived from pigs, it is okay to use that vaccine because saving a person's life is more important than dying just to adhere to laws of
kashrut. Interestingly enough, Muslim suicide bombers also had to be evaluated for whether or not they fell in the boundaries of Islam, because obviously their bodies were not going to get their proper treatment and burial. It was decided that, yes, because they were dying in holy martyrdom, it was acceptable to overlook the method in which their bodies were destroyed.
Anyhow, due to the cultural difficulties
both Israeli and Arab culture had with the notion of organ donations, and considering that the concept hasn't fully sunk in and been accepted by either, what these doctors were doing by taking organs from both Arabs and Israelis was dangerous from a social standpoint.
Also, that it adds to the Palestinian perception that they are considered as subhuman: somewhere between an inconvenience and a resource to be mined. After all, the Palestinians see random people on their side of the line killed by Israeli weapons on a regular basis, including noncombatants; if the Israelis were to declare a policy of breaking down the people they kill for spare parts, they have to wonder where it would stop.
From the Palestinians' standpoint they'll focus on their own people being harvested for organs, but the doctors in this program were also harvesting from dead Israelis, some of which may well have been victims of terrorism themselves. The follow-up article by the doctor definitely mentioned the IDF soldiers who fell in battle were being harvested as well.