Israel would want to severely reduce their capabilities - but what Israel does NOT want to do is destroy all semblance of government - or else Israel is forced to actually come in there itself, and supply the “civilian government” on its own. Israel wants to leave enough structure so that it is still self-governing and does not require Israel to come in, itself.
SO ... Israel will try to severely degrade the “terrorist capacity” without destroying infrastructure that is needed. The real problem is that Hamas is the terrorist organization — AND — they are the government at the same time.
I think that letting Gaza go was a HUGH mistake, but that is me.
Hamas could very well learned that it made a HUGH mistake taking on its neighbor.