On Thursday afternoon on the beach in Tel Aviv, a lifeguard made an announcement through the broadcast system. “Attention all bathers,” he said. “It is not yet 100% confirmed … but the chances are very high that the rat from the tunnels known as Yahya Sinwar is dead.”

The beachgoers immediately erupted into clapping and cheers, scenes replicated around Israel throughout the evening as the details of the Hamas leader’s killing in Gaza emerged.

Sinwar, the architect of the 7 October attack last year in which 1,200 people were killed and another 250 taken hostage, encountered a routine Israel Defense Forces (IDF) patrol unit in Rafah on Wednesday. Wounded and separated from the other fighters he was with, he took shelter in a partly destroyed house. An army drone captured the 61-year-old’s last action: he threw a piece of debris at it, moments before the Israeli troops called in tank fire which collapsed the rest of the building.

Sinwar’s death was expected, even if the manner in which he was finally caught and killed was not. For many in Israel, the conclusion of the year-long hunt for the man responsible for the worst attack on Jewish people since the Holocaust was grimly cathartic. As Israel’s prime minister, Benjamin Netanyahu, put it in a televised address on Thursday night: “We have settled the score.”

How the Hamas leader’s death could impact Israel’s multifront war, and affect the fate of the 100 or so hostages still in Gaza, is now at the forefront of people’s minds. Sinwar, who had the final word on Hamas’s position in ceasefire talks, had repeatedly blocked progress towards a deal.

“There seems to be a consensus that this is a bridge to something. The question is: what is that something?” said Dahlia Scheindlin, a Tel Aviv-based political analyst and public opinion expert. “There’s a sense this needs to be leveraged quickly, and among the more dovish commentators, that means a hostage deal.”

There are still many unknowns that could affect the war’s trajectory, including Israel’s anticipated response to the Iranian missile attack of 1 October, and the outcome of the US elections next month. But protesters in favour of a deal once again thronged the streets of Tel Aviv on Thursday night, urging Israel’s leaders to act on the seismic news of Sinwar’s killing.

“I refuse to celebrate death, I’m waiting to celebrate life,” one placard read; “The picture of victory is the final hostage, not Sinwar in a coffin,” read another.

There is anxiety that Sinwar’s killing could endanger the remaining hostages. In August, a Hamas fighter who killed a hostage “in revenge” and against his orders after learning his children had been killed in an Israeli airstrike.

In a statement, the Hostages and Missing Families Forum said: “The forum commends the security forces for eliminating Sinwar, who masterminded the greatest massacre our country has ever faced.

“However, we express deep concern for the fate of the 101 men, women, elderly and children still held captive. We call on the Israeli government, world leaders, and mediating countries to leverage the military achievement into a diplomatic one.”

The Biden administration has already urged Netanyahu to use Sinwar’s killing as an off-ramp for ending the war in Gaza, which has killed almost 43,000 people and displaced 90% of the population amid a humanitarian crisis exacerbated by Israel’s control over aid.

But to date the Israeli leader has shown little appetite for winding down the war effort in the Palestinian territory. In absence of any day-after plan, it appears Israel is moving towards an indefinite military occupation of the Gaza Strip, even though the IDF has now achieved all of its stated objectives in Gaza – other than the return of the hostages. In his speech on Thursday, Netanyahu vowed that “the war is not over”.

With Sinwar dead, there may now be more manoeuvring room in talks with Hamas, but any deal would still be anathema to Netanyahu’s rightwing coalition partners, who could bring down his government over the issue. The longtime leader sees staying in office as the best way of evading prosecution on corruption charges; he has been widely accused of putting his political survival ahead of the fate of the hostages.

Recent polling shows that Jewish Israelis are split between a ceasefire deal or continuing military action, by 45% to 43% – and those that favour pushing on with the war effort are, by and large, Netanyahu’s base.

The Tikva Forum, which represents hostage families who prioritise military action over a ceasefire deal, argued in a statement on Thursday that Sinwar’s death was an opportunity to “finish the job”.

“Precisely now – we must increase the military pressure, occupy maximum territory and stop the ongoing supply of aid to Hamas terrorists,” it said. “When Hamas is on its knees begging for a deal, we can consider a deal that will return all the hostages together.”

Sinwar’s killing, coming as it does on the back of a string of daring and high-profile assassinations of enemy leaders in recent months, is a boon for Netanyahu. His already low approval ratings plummeted in the wake of 7 October and have slowly crept back up – although according to Scheindlin, the public opinion expert, polling may not matter so much in the immediate future.

“Sinwar wasn’t killed in some brazen and sophisticated raid, so his death may not be as much of a boost as Bibi would hope,” she said.

“Ultimately he has already shored up his coalition and there’s no institutional mechanism to remove him, so I think there’s now a widespread acceptance that he could stay in office.”