According to Barak Ravid, after Hamas informed Israel that it did not have 40 humanitarian hostages to release, Israel asked to make up the quota with men and soldiers.
In return, the Netanyahu government has agreed to make more concessions, such as offering more Palestinian prisoners and removing more barriers on the return of refugees in the south to northern Gaza. The move reflects increasing desperation to get a deal done.
When you are 6 months into a war with no end game and no strategy for governing the areas you fight for... this is where you end up. A war without a clear strategy cannot be won.