Overall good post! You are right: While the body count in Gaza is an epic tragedy, they have more or less achieved their objectives of derailing the progress of the Abraham Accord to include Saudi Arabia, at least for now. And you are right: The Soviets also lost many, as did the Vietnamese as did the Afghans but they all eventually prevailed.
And Israel is aware of it. Especially, Netanyahu knows that short of his 'total victory', his own political future is dark and Israel's own viability would be a big question mark. It would be like a nuke on Israel if the educated, connected European-origin Jews lose faith in Israel's viability and leave en masse to Europe; they have the means to do so!
As to quoted part: Gone are the talks of the Sinai Tent City or the mass expulsion through the so called Gaza Peer. Both would be to Israel's liking but were not feasible due to the large, resistant population in Gaza, plus there is enough international pressure to prevent that--even from the seemingly collaborative Arab nations. I think what Netanyahu wants to achieve is to engineer a regional war to bring in the Americans and in the 'fog of war', destroy and expel Gazans into the Sinai.