In what sense are we not officially at war with Palestine? Nobody ever signed an armistice, ceasefire, or peace deal to end the War of 1948. Nobody even wants to. The official policies of both the PLO and Hamas remain "struggle until victory". There are internal political reasons for this that any knowledgeable person can describe, but as far as anyone who lacks inside influence is concerned, that's their policy and they're sticking to it.
In the literal sense. The territories that form Palestine and the West Bank today were part of Egypt and Jordan before the six-day war. Israel occupied these territories during the war, then signed peace treaties with the countries it defeated. The three Arab countries (including Syria) attempted to recapture their territories again in 1973, but failed, and peace treaties were again signed between all four countries involved.
In the meantime, people living in the territories occupied by the Israeli military forces continued their fight for freedom, as all occupied people do. They made some strides in this direction with the Oslo accords, where they gained official recognition as a separate country under their own authority.
While open hostility existed on both sides since the beginning, there has never been an official war declaration between the PLO and Israel. Both have been routinely attacking and killing civilians and destroying infrastructure in each other's country forma long time - though Israel now has a vast upper hand and the killing and destruction has become more and more one sided against the people of Palestine.
To talk of a "peace process", or even of an entrenchment of the Occupation, you need to acknowledge the existence of a second party to the conflict, who in any practical point of view are in a military struggle, that being a war, with the other party. Maybe you agree with their military-political demands, maybe you disagree. But certainly they exist, and are in fact fighting.
If I were to treat it as reasoning rather than polemic, I would say it's projecting an expected - and feared - possible future backwards into the present. The idea seems to be, "we don't want the Palestinian Arabs to end up as a conquered, dispersed, exiled, or killed former nation, so we treat them as already dead, then cheer for them, being already dead, to rise up and prevent their own deaths ahead of time." That's getting a bit speculative and psychoanalytic, but it does sort of explain the grim, dark "rage against the dying of the light" attitude people display when trying to argue simultaneously that there's no war and that the Palestinian side of the war needs more support.
My objection to the whole complex is: there is no dying of the light. Millions of people are right there, year after year, dealing with various endemic problems because, by and large, the peculiar factionalization of their political system forbids them to do anything else. There's no dramatic moment to wait for. They're just gonna suffer more as long as everyone keeps cheering for them to put victory over coexistence.
When fighting against a dirty enemy, it is mostly acceptable to be dirty in turn. But as your enemy is close to defeat and is losing any power to harm you, you're supposed to stop the dirty tactics that were necessary and (somewhat) justified earlier.
Israel is a part of Palestine. Palestine has never been a state. How can "we" (Israel, I presume) have ever been officially at war with a territory they are occupying? How can you sign an armistice to end a war that was never declared?