Israel cares a whole lot about its hostages. Evidence for that are the prices they were willing to pay in the past.

But sure, let’s go with your logic. Why can’t Israel just go carpet-bombing the crowded part in the south of the Gaza strip that all the refugees fled to? It would be a very effective way to eradicate them all. They are so crowded in such a small area that it’s possible to kill a couple hundred thousands in a single day. Wow, Israel has a lot to learn on how to ethnically cleanse a region.