Killing Yahya Sinwar is Israel’s biggest victory so far in the war against Hamas in Gaza.

His death is a serious blow for Hamas, the organisation he turned into a fighting force that inflicted the biggest defeat on the state of Israel in its history.

He was not killed in a planned special forces operation, but in a chance encounter with Israeli forces in Rafah in southern Gaza.

A photo taken at the scene shows Sinwar, dressed in combat gear, lying dead in the rubble of a building that was hit by a tank shell.

• Follow live updates on this story
• Who was Yahya Sinwar?
• Explainer: How Israel killed Hamas leader Sinwar in a chance encounter
• Watch: Netanyahu says focus on hostages after Sinwar death
• Explainer: What has happened to Hamas’ most prominent leaders?

Benjamin Netanyahu, Israel’s prime minister, praised the soldiers and made clear that however big a victory, it was not the end of the war.

“Today we made clear once again what happens to those who harm us. Today we once again showed the world the victory of good over evil.

“But the war, my dear ones, is not over yet. It is difficult, and it is costing us dearly.”

“Great challenges still lie ahead of us. We need endurance, unity, courage, and steadfastness. Together we will fight, and with God’s help – together we will win.”

Netanyahu and the overwhelming proportion of Israelis who support the war in Gaza needed a victory.

The prime minister has repeated his war aims many times – destroying Hamas as a military and political force and bringing the hostages home.

Neither has been achieved, despite a year of war that has killed at least 42,000 Palestinians and left much of Gaza in ruins.

But the remaining hostages are not free and Hamas is fighting and sometimes killing Israeli troops.

Killing Sinwar was the victory Israel wanted. But until Netanyahu can claim that the other war aims have been accomplished, the war, as he says, will go on.

Yahya Sinwar was born in 1962 in a refugee camp in Khan Younis in the Gaza Strip. He was five years old when it was captured by Israel from Egypt in the 1967 Middle East war.

His family were among more than 700,000 Palestinians who fled or were expelled from their homes by Israeli forces in the 1948 war in which Israel won its independence.

His family came from the town now known as Ashkelon, which is close to the northern border of the Gaza Strip.

In his 20s, he was convicted by Israel of killing four Palestinian informers. During 22 years in jail he learnt Hebrew, studied his enemy and believed that he worked out how to fight them. His time in jail also meant Israel had his dental records and a sample of his DNA, which meant that they could identify his body.

Sinwar was released as one of more than 1,000 Palestinian prisoners who were swapped in 2011 for a single Israel soldier, Gilad Shalit.

On 7 October last year, in a meticulously planned series of attacks, Sinwar and his men inflicted Israel’s worst-ever defeat – and a collective trauma that is still deeply felt.

The killing of around 1,200 Israelis, the hostage-taking and the celebrations of their enemies recalled for many Israelis the Nazi holocaust.

Sinwar’s own experience in a prisoner swap must have convinced him of the value and power of taking hostages.

In Tel Aviv families of the remaining 101 hostages in Gaza – Israel says half of them might already be dead – gathered in the square in which they have been gathering for a year, urging the Israeli government to launch a new negotiation to get their people home.

Einav Zangauker, mother of hostage Matan Zangauker appealed to the prime minister.

“Netanyahu, don’t bury the hostages. Go out now to the mediators and to the public and lay out a new Israeli initiative.”

“For my Matan and the rest of the hostages in the tunnels, time has run out. You have the victory pictures. Now bring a deal!”

“If Netanyahu doesn’t use this moment and doesn’t get up now to lay out a new Israeli initiative – even at the expense of ending the war – it means he has decided to abandon the hostages in an effort to prolong the war and fortify his rulership.

“We will not give up until everyone returns.”

Many Israelis believe that Netanyahu wants to prolong the war in Gaza to put off the day of reckoning for his share of the security failures that allowed Sinwar and his men to break into Israel, and to postpone perhaps indefinitely the resumption of his trial on serious corruption charges.

He denies those accusations, insisting that only what he calls ‘total victory’ in Gaza over Hamas will restore Israeli security.

Like other news organisations, Israel does not let the BBC cross into Gaza except on rare, supervised trips with the army.

In the ruins of Khan Yunis, the birthplace of Sinwar, Palestinians interviewed for the BBC by local trusted freelancers were defiant. They said the war would go on.

“This war is not dependent on Sinwar, Haniyeh, or Mishal, nor on any leader or official,” said Dr Ramadan Faris.

“It’s a war of extermination against the Palestinian people, as we all know and understand. The issue is much bigger than Sinwar or anyone else.”

Adnan Ashour said some people were saddened, and others were indifferent about Sinwar.

“They’re not just after us. They want the entire Middle East. They’re fighting in Lebanon, Syria, and Yemen… This is a war between us and the Jews since 1919, over 100 years.”

He was asked whether the death of Sinwar would affect Hamas.

“I hope not, God willing. Let me explain: Hamas is not just Sinwar… It’s the cause of a people.”

The war goes on in Gaza. Twenty five Palestinians were killed in a raid on northern Gaza. Israel said it hit a Hamas command centre. Doctors at the local hospital said the scores of wounded that they treated were civilians.

Parachute drops of aid resumed after the Americans said Israel had to allow in more food and relief supplies.

Every leader of Hamas since the 1990s bar one has been killed by Israel, but there’s always been a successor. As Israel celebrates killing Sinwar, Hamas still has its hostages and is still fighting.