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One of them was a tall white red headed man, yet the soldiers claim that they thought they were Hamas militants. They confused a read head scared man pleading in Hebrew with an Arab man.

It reminds me of this:

Others, including survivors of the attack, have rejected these conclusions and maintain that the attack was deliberate.

I understand your anger, but I feel compelled to make some remarks.

The IDF did personally pull the trigger to shoot and kill three of the hostages who were, at the time, waving white flags made from their shirts. This event is surely very telling, and was also immediately considered a catastrophe, with Israeli responses on all ends of the spectrum. On the more sane end you have the official statement by the IDF chief of staff, who didn't mince words about this:

“You see two people, they have their hands up and no shirts — take two seconds,” IDF Chief of Staff Lt. Gen. Herzi Halevi told soldiers in Gaza on Sunday. Halevi said a day earlier that the soldiers who shot the three had opened fire in breach of IDF protocols.

“And I want to tell you something no less important,” Halevi continued. “What if it is two Gazans with a white flag who come out to surrender? Do we shoot at them? Absolutely not. Absolutely not.

“Even those who fought and now put down their weapons and raise their hands — we capture them, we don’t shoot them. We extract a lot of intelligence from the prisoners we have; we have over 1,000 already,” he told the soldiers.

Halevi added: “We don’t shoot them because the IDF doesn’t shoot a person who raises his hands. This is a strength, not a weakness.”

Now, given the actual event which speaks for itself, there is obviously a very deep disconnect between what the chief of the IDF touts as policy here and what the soldiers end up doing in practice. You could posit that the chief is speaking out of his ass, but the more probable theory is that higher up on the hierarchy some officers are sincerely convinced that they are leading the charge of the Most Moral Army in the World(tm), and meanwhile some hefty portion of the boots on the ground have decided to, like you've phrased it, kill everything that moves and fuck the rules of engagement. I don't know if I would go so far as to say this proves such a grand statement such as "genocide is the goal of the Zionists". Do the events of Oct 7 prove that "genocide is the goal of the Palestinians"? What are we supposed to do with this conclusion? Does it lead anywhere productive?

The hostages are not political pawns for Netanyahu, they are a huge headache for him. Netanyahu could very well easily continue the military campaign just on the promise of dealing with Hamas alone; he would in fact much prefer this, and would like nothing more than to be rid of the constant shouting about the hostages. It's an open secret that the hostage families have effectively thrown in their lot with Netanyahu's most fierce opposition; they're constantly shouting for "a deal NOW" and "negotiate with Hamas NOW", to the degree that this has become somewhat of a wedge issue in Israel, you're expected to be a "bring back the hostages, stop the war, reach a deal now, kick out Netanyahu, left winger" or a "push on, let the chips fall where they may, destroy Hamas, keep Netanyahu, right winger". I am exaggerating but really not by much, and some paper op-eds have written on this topic extensively. The state, for what it's worth, evidently cares about this issue a lot more than Netanyahu himself does, or you wouldn't have had the first ceasefire in the first place.