I just can't see what the strategy here was for Hamas. Yes, they might have wanted to trade a few prisoners. Maybe a bit of revenge. But what political strategic goal were they trying to advance, like troops out, or independence or nationhood, or draw attention to the cause or something? I can't see it. There wasn't one, it was a pogrom for them and a win for their backers.
Best guess I've seen so far is get a few hostages, trade them for prisoners/hostages, and possibly more labor permits (they've been trading for those, though not sure that would have been part of their predictions fort his deal) and maybe the port of Gaza opened somewhat? Maybe someone can link to a good article on this, I've seen more smattering of comments.
The West Bank is becoming more and more Israeli via settlements and Gaza is a permanent prison, so if you're in charge of Gaza, you can either say "we need to scare the Israelis into concessions, or we need to cut our losses and take any deal we can get." Is there a deal on the table? Not really. I guess a good enough offer, the Israelis would be pressured to take, but the people of Gaza and the West Bank wouldn't support it or abide by it. They'd simply start supporting and joining other groups. They don't have real sovereignty.
I'm not sure how long Israel will have that either. If Gantz replaces Netanyahu as the polls suggest, and he has the coalition and desire to stop the settlements and say open up the port of Gaza with inspections done by the U.S or whoever, how long until the settlers/religious Zionists turn to insurrection? Or another Intifida starts? I'm probably guilty of overreacting to the events in a long conflict that have occurred during my early adult life, but I think the 2 state solution is probably dead, and I'm not sure how the hell a 1 state solution would even work. I've met a few Palestinians, but I'm a Jew who's been to Israel and follows Israeli politics and the demographic trends are moving further away from peace, and the appetite for peace just isn't there. There may be an appetite there to end the war if it goes on too long, but that's different than ending the settlement expansion or making peace.
The attack was horrible, but of course there's a strategic reason behind it, just like there is for the Israeli mass bombing campaign. There's almost always a strategic reason when it's not just a mob of people or a lone attacker, and even then there's often sort of one those too, unless they're non-political.