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What you’re describing is genocide plain and simple. If I really have to explain to you why genocide is not a solution there really is no hope for you.
Yes it is Genocide, from both sides. That tends to happen in wars.
From https://en.wikipedia.org/wiki/War_and_genocide: The War and Genocide school of thought encompasses the vast majority of scholars and contends that those killed in war can be considered victims of genocide. Scholars in this school reference the genocidal capacities of certain methods of war, such as nuclear weapons, pattern-, fire-, and carpet-bombing, or other indiscriminate strategies, as the use of genocidal violence.
War may not be the best solution, but given that both sides want to exterminate the other, I'm not sure what compromise you expect until one side is weakened enough that they are forced to give up.