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This study examines a DEI-led dialogue program for Palestinian and Jewish-Israeli students at an Israeli university during the 2024–2025 academic year, amidst the second year of the Gaza War. Analyzing interviews and observations through Grounded Theory lens, we investigate how protracted warfare shapes such encounters. Findings reveal a central paradox: while personal storytelling and joint projects fostered empathy and interpersonal bonds, they failed to bridge the political divide. We argue this stems from an asymmetrical struggle for recognition, where Palestinian participants sought validation for their narrative and identity, while Jewish participants sought validation for trauma rooted in the October 7th attacks. This study challenges intergroup contact theories, showing that contact alone is insufficient to overcome political struggles for recognition.