Israel has wanted to build a canal in that area for a long time to offer an alternative to the Egyptian owned Suez Canal. They could go around Gaza to do it, but they don't want to. They want it in northern Gaza. During this war, Israel's bombing campaign has mostly focused on northern Gaza. They are trying to push those people south.
The US has been in talks with Israel for a long time regarding this. It would add a safer route for the US to bring military ships into the region if need be.
As Israel intensifies its Gaza onslaught, focus turns to the controversial Ben Gurion Canal Project, originally proposed in the 1960s as an alternative to the Suez Canal.
www.newarab.com
In recent weeks, the world public has been confronted with the brutal war between Israel and Hamas. The international community, despite its great power and massive protests against the war in Gaza, has turned into a mere bystander allowing the Israel Defense Forces (IDF) to slowly but surely...
www.eurasiareview.com
Building such a canal would have a heavy impact on the economy of Egypt and unless it were done in a way that would profit both Israel and Palestine (which is unlikely IMO), it is going to piss off most of that region. Especially without the consent of Saudi Arabia.
It would, however, be a boost to the world economy by providing a major shipping route. Remember a few years ago when a ship got stuck and blocked the entrance to the Suez Canal and caused a major traffic delay that disrupted international shipping? Having two canals would solve that.
2021 Suez Canal obstruction - Wikipedia
That said, Palestine isn't innocent or even good here. They started this round of this never ending war by going into Israel and attacking, murdering, raping, and kidnapping a bunch of people that were at a festival amongst others.
They've been trying to wipe Israel off the planet for a very long time. They are the ones currently marching through our streets chanting the same thing Netanyahu said, "From the river to the sea, Palestine will be free."
Netanyahu's goal here is to protect his country and make a lot of money off a canal. The US's goal here is to bring enough stability to that area so our military ships can get in and out to keep the rest of the region in check. For that to happen, the hostages need to be returned, Hamas and his regime need to go, and the canal needs to be built. Whether that canal goes through Gaza or just north of it really just affects the cost to build it and the time for the ships to travel it (aka more cost). As for building infrastructure for the remaining Palestinians, that comes with building the canal and the cities Israel is going to build around it to boost tourism.
The US is probably going to build it for them like we did in Panama. We'll setup a deal where we'll profit off of it for a while, and probably use similar incentives for Saudi Arabia too.