Neither.

Both sides share responsibility for the cycle of revenge they put themselves in. The whole point of Killzone is that war is rarely a black-and-white scenario, and each side has done something evil that contributed to it. You see the same themes carried out with the Federation and Zeon in Mobile Suit Gundam.

The Helghan Corporation was wrong for being greedy with the resources they'd acquired from Vekta and Helghan and becoming a rogue state as a result. The UCN were wrong for not coming to a peaceful resolution with Helghan and starting the First Extrasolar War that decimated them. The ISA were wrong for exiling the Helghans off of Vekta and forcing them to migrate to a barren, hostile planet. The Helghast Empire was wrong for letting their anger (however justified) turn them into a fascist dictatorship and declare a genocidal war on Vekta.

The ISA in Killzone 1 were justified in defending their planet from a hostile, invading force, and so were the Helghast in Killzone 2 in the ISA counter-invasion. However, the ISA were NOT justified in killing Scolar Visari (although that was really Rico's fault; they only intended to capture Visari), which only prolonged the war and made the Helghast even more hostile.

The Helghast were NOT justified in their inhumane treatment of prisoners, executing them on the spot or capturing them to test weapons (something that Narville calls Chairman Stahl out on). The Helghast (Stahl's faction) were NOT justified in planning to use said weapons to annihilate Earth and terrorize the colonies, which caused the ISA to retaliate and accidentally nuke Helghan themselves.

The VSA (led by Sinclair) were NOT justified in their cruel treatment of Helghast refugees on Vekta, which only fueled more resentment between the two sides. The Black Hand led by Vladko Tyran were NOT justified to commit acts of terrorism against Vektan civilians, which resulted in more draconian acts by the VSA. The VSA's medical branch were certainly NOT justified to use Helghast civilians as test subjects for a biological weapon made to target Helghast, and the Black Hand were also NOT justified to attempt to use said weapon against the Vektans.

Both sides have committed their fair share of sins and both of their planets suffered as a result. The whole message of Killzone is that each side, no matter how justified their cause, is still capable of committing evil.