Hamas has signed its own death certificate. There is no way that Israel can allow a single Hamas terrorist cell member or supporter to live after a statement like that.
This is a fight to the death of the last Hamas, sympathizer, the last Hamas clerk-typist, the last Hamas logistic warehouse man, the last Hamas medic, the last Hamas accountant, the last Hamas politician or civil servant. They all need to be killed so that organization can never kill or function again.
The IDF should show no quarter. Everyone associated with Hamas is a terrorist and has no rights of fair combat or international rules of military conduct.
And yes there will innocent collateral damage among civilians. Those innocent civilians need to flee, as Israel has suggested to other parts of Gaza and they need to separate themselves from Hamas and provide information to the IDF.
The problem is that Hamas is keeping the civilians in Gaza at gunpoint and not permitting them to flee.