That was my thinking on it too. Basically they will try to get whatever results they are looking for with Hamas and then seal the border. Tbf this may be the best option for both Gaza and Israel in the long run. Not interfering with each other at all. But it absolutely kills the 2 state solution dead. Israel never really wanted to occupy Gaza and they don’t want to now either. I think they want to forget it exists. But the Gazans have to be given territorial waters, no more blockade except the land border with Israel.
Gaza does have a desalination plant (which requires fuel) which the EU helped to build, maybe with some aid a few more can be built after this is over. The rebuild will be insanely expensive and long but I imagine significant funds will be made available by various governments to help make it happen.