leverage [...] to negotiate something
The answer to this question is going to depend on what that something is. Thus far Israel says is only willing to accept outright surrender [or death] of Hamas as the conclusion of the military campaign. For example, defense minister Gallant said on Oct 17
Hamas members have two options: Either die in their positions or surrender unconditionally. There is no third option.
Similar quotes from Netanyahu earlier on can be found in a related Q&A. I haven't followed this closely since then, but I've not seen any other statements altering that ultimate goal.
Israel was willing to negotiate a temporary ceasefire, with a somewhat complicated structure--trading some Palestinian prisoners, limited-time ceasefire, and more aid to Gaza in exchange for Hamas releasing some hostages.
Israel says that civilian casualties are unavoidable collateral damage and [says] they won't stop their military campaign because of that. E.g.
“In 1944, the Royal Air Force bombed the Gestapo headquarters in Copenhagen — a perfectly legitimate target,” Prime Minister Benjamin Netanyahu of Israel said in an address to his nation on Oct. 30. “But the British pilots missed and instead of the Gestapo headquarters, they hit a children’s hospital nearby. And I think 84 children were harmed and burned to death. That is not a war crime. That is not something you blame Britain for doing.” (In fact the bombing was in 1945, hit a school, and is believed to have killed 86 children and 18 adults.)
Mr. Netanyahu added that the attack “was a legitimate act of war with tragic consequences that accompany such legitimate action. And you didn’t tell the Allies, ‘Don’t stamp out Nazism because of such tragic consequences.’”
Whether you believe them or not that they won't stop the war unless Hamas is completely defeated is in the eye of the beholder right now. History of past Israel-Hamas clashes argues against it, but then there was no prior Hamas attack of the magnitude of Oct 7. Certainly the US--whose opinion matters more than others'--thus far remains supportive of Israel's ultimate goal in this campaign, even if they are making somewhat more noises about the safety of Gaza civilians than Israel is. For example, Biden said on Nov 18:
If Hamas cared at all for Palestinian lives, it would release all the hostages, give up arms, and surrender the leaders and those responsible for Oct. 7.
As long as Hamas clings to its ideology of destruction, a cease-fire is not peace. To Hamas’s members, every cease-fire is time they exploit to rebuild their stockpile of rockets, reposition fighters and restart the killing by attacking innocents again. An outcome that leaves Hamas in control of Gaza would once more perpetuate its hate and deny Palestinian civilians the chance to build something better for themselves.
Although Netanyahu did apparently soften his position on a temporary ceasefire (e.g. compared to Nov 10), he was also quoted as saying on Nov 21 as the ceasefire began:
Israeli Prime Minister Benjamin Netanyahu on Tuesday asked his government to accept a deal for Palestinian Hamas militants to free some hostages in Gaza in exchange for a multi-day truce even as the death of a hostage in captivity was announced. [...] The pause would facilitate delivery of humanitarian aid to Gaza. [...]
But Netanyahu said Israel's broader mission had not changed.
"We are at war and we will continue the war until we achieve all our goals. To destroy Hamas, return all our hostages and ensure that nobody in Gaza can threaten Israel," he said in a recorded message at the start of the latest government meeting.
And the US also doesn't appear to change their tune, e.g. in a presser on Nov 28:
Q[:] Also, Israel has said that in renewing their military campaign, you know, they want to get rid of Hamas altogether. Is that something that the U.S. still thinks is realistic?
MR. KIRBY: We believe they have a right and a responsibility to eliminate this terrorist threat. And Hamas showed its colors pretty well on October 7th, and it’s still a viable threat to the Israeli people and to the Israeli nation.
And so, they have said that they’re going to resume operations. I’ll let them speak for their plans and their intentions. But we still believe that they face a truly genocidal threat from Hamas.
And if you care what some pundits say...
CNN's Becky Anderson, Nov 27:
For Hamas, the holding of hostages presents the only real leverage they have over Israel. The promise to release hostages has been the only thing that caused Israel to relent in seven weeks of fighting.
The New Arab, Nov 27:
Hamas are aware that hostages are their only leverage when it comes to negotiating ceasefires or humanitarian pauses with Israel.
Patrick Wintour, The Guardian, Nov 24:
Hamas risks losing leverage if all hostages are freed, and Benjamin Netanyahu promised a full victory. [...] Netanyahu has called it a fight between barbarism and civilisation, so can hardly afford a conflict that does not lead to complete victory.
NATO Stratcom, but back in 2014:
Hamas’ use of human shields is therefore likely aimed at minimising their
own vulnerabilities by limiting the Israeli Defense Forces’ (IDF) freedom of action. It is also aimed at gaining
diplomatic and public opinion-related leverage, by presenting Israel and the IDF as an aggressor that indiscriminately strikes civilians.
So, yeah, using own civilians as human shields that are hard to avoid can be construed as leverage, although several sources writing about the present conflict seem to evaluate that that isn't working as well in the present context.
This Nov 3 FT piece by Aaron David Miller is slightly dated commentary (from before the temporary ceasefire), but still seems relevant in view of other declarations by both leader since then:
The sheer scale of the death toll in Gaza, combined with rising anger in the president’s own party and among America’s allies, would seem likely to push Biden towards the point at which he’ll need to press Israel hard on restraint, even a significant pause or end to its military campaign. But thus far Biden’s persona, the magnitude of the slaughter on October 7 and the dearth of good options have clearly limited the extent of influence and leverage the US is willing and able to bring to bear on Israel. It’s hard to imagine this president calling Netanyahu with a disarmingly simple message: enough.
Indeed, when it comes to preventing the deaths of Palestinian civilians in Gaza, both Biden and Israel are in a bind — and right now there seems to be no way out.
Basically, civilian casualties in Gaza are an indirect form of leverage for Hamas, only effective to the extent that others internalize these casualties as disproportionate [in a given context] and these others exert their own leverage on Israel's government.