The United Nations, international human rights organizations and many legal scholars regard the Gaza Strip to still be under military occupation by Israel. This is disputed by Israel and other legal scholars.

Is blockading a hostile territory the same as occupation? Israel asserts it isn't. Generally, occupied lands means the occupying force installs the leadership, like in Vichy France, or has their military in charge. Israel didn't do this after they withdrew. They removed their troops from within Gaza's borders, forcibly relocated their settlers, and let Gazans elect their own leadership, (they chose Hamas, who as cited above is dedicated to Israel's complete destruction.) Giving Gaza more leeway and freedom by withdrawing didn't seem to work out well for Israel, and they understandably have refused to lift the blockade while Hamas remains in power there.

While it's true that the IDF remains in control of many things in Gaza due to the blockade and Gaza's reliance on Israel for power and supplies, if one sees Gaza as an unyielding belligerent that remains hostile rather than an already conquered foe, it changes the situation somewhat. This isn't punishing those who have already surrendered. They have lost every war yet keep killing Israelis, militarizing to the best of their abilities, refusing to concede, despite being aware of these dependances on Israel and the obvious consequences of attacks. If one sees Gaza as a hostile enemy that refuses to surrender in a war that has been ongoing for over a century now then blockades, sanctions, and all manner of economic carrots and sticks are acts of self-defense, tactics that are common in wartime. While they undoubtedly lead to civilian suffering that's not the point. Pacification with carrots and sticks is the point, like other nation-states often do.

According to Eyal Benvenisti, occupation can end in a number of ways, such as: "loss of effective control, namely when the occupant is no longer capable of exercising its authority; through the genuine consent of the sovereign (the ousted government or an indigenous one) by the signing of a peace agreement; or by transferring authority to an indigenous government endorsed by the occupied population through referendum and which has received international recognition". source

What's happened in Gaza certainly seems to be a loss of effective control, and Israel has transferred authority to an indigenous government endorsed by the occupied population through referendum and which has received international recognition, (Hamas.)

You gave me a lot to respond to. Since reply length is limited to 5k characters, I must break up my reply into several posts:

that is no longer the Hamas charter, the current charter recognizes the israeli state territory.

You trust Hamas when they say they changed their tune? I don't. How can you claim they are not genocidal when Hamas just launched a genocidal attack where they murdered as many civilians as possible? That's what caused this most recent outbreak of war.

Hamas' new charter sill calls for Palestine to claim all of Israel in Article 2:

On May 1, 2017, Hamas issued a revised charter. Gone were the “vague religious rhetoric and outlandish utopian pronouncements” of the earlier document, according to analysis prepared for the Institute of Palestine Studies. Instead, the new charter was redolent of “straightforward and mostly pragmatic political language” that had “shifted the movement’s positions and policies further toward the spheres of pragmatism and nationalism as opposed to dogma and Islamism.” Nonetheless, the analyst was struck by “the movement’s adherence to its founding principles” alongside newly crafted, “carefully worded” language suggesting moderation and flexibility.
Israel immediately dismissed the group’s effort to promote a kinder, gentler image of its once avowedly bloodthirsty agenda. “Hamas is attempting to fool the world, but it will not succeed,” a spokesperson from Prime Minister Benjamin Netanyahu’s office predicted.
In fact, the new document differs little from its predecessor. Much like the original, the new document asserts Hamas’s long-standing goal of establishing a sovereign, Islamist Palestinian state that extends, according to Article 2, from the Jordan River to the Mediterranean Sea and from the Lebanese border to the Israeli city of Eilat—in other words, through the entirety of Israel, the West Bank, and Gaza. And it is similarly unequivocal about “the right of return” of all Palestinian refugees displaced as a result of the 1948 and 1967 wars (Article 12)—which is portrayed as “a natural right, both individual and collective,” divinely ordained and “inalienable.” That right, therefore “cannot be dispensed with by any party, whether Palestinian, Arab or international,” thus again rendering negotiations or efforts to achieve any kind of political settlement between Israel and the Palestinians irrelevant, void, or both. Article 27 forcefully reinforces this point: “There is no alternative to a fully sovereign Palestinian State on the entire national Palestinian soil, with Jerusalem as its capital.” source - archival link because paywall

It was palestinian territory and israel were the invaders, that was the beginning of the killing and exiling of palestinians from their own land.

Diaspora Jews would be better classified as refugees than invaders before hostilities began. They started out legally purchasing land in Palestine, not killing and exiling people for it.

As for the source of those initial hostilities:

among the first recorded violent incidents between Arabs and the newly immigrated Jews in Palestine was the accidental shooting death of an Arab man in Safed, during a wedding in December 1882, by a Jewish guard of the newly formed Rosh Pinna. In response, about 200 Arabs descended on the Jewish settlement throwing stones and vandalizing property. Another incident happened in Petah Tikva, where in early 1886 the Jewish settlers demanded that their tenants vacate the disputed land and started encroaching on it. On March 28, a Jewish settler crossing this land was attacked and robbed of his horse by Yahudiya Arabs, while the settlers confiscated nine mules found grazing in their fields, though it is not clear which incident came first and which was the retaliation. The Jewish settlers refused to return the mules, a decision viewed as a provocation. The following day, when most of the settlement's men folk were away, fifty or sixty Arab villagers attacked Petach Tikva, vandalizing houses and fields and carrying off much of the livestock. Four Jews were injured and a fifth, an elderly woman with a heart condition, died four days later.
By 1908, thirteen Jews had been killed by Arabs, with four of them killed in what Benny Morris calls "nationalist circumstances", the others in the course of robberies and other crimes. In the next five years twelve Jewish settlement guards were killed by Arabs. Settlers began to speak more and more of Arab "hatred" and "nationalism" lurking behind the increasing depredations, rather than mere "banditry".

An accidental death that could have been resolved legally instead resulted in mob violence by Arab Palestinians against Jews.

In fact, most of the early conflicts between Jews and Arabs in mandatory Palestine were instigated by Arabs.

Then there's the Jaffa riots of 1936, started by the robbery and murder of Jews at a roadblock. This violence spilled out into a general revolt against the British occupation of Mandatory Palestine which convinced the Peel commission and the diaspora Jews in Palestine that a two-state solution was needed, and eventually led to Britain's withdrawal from the area.

They could have lived together in peace but Arab Palestinians started civilian violence, refused to make concessions, and outright rejected this two-state solution. (Look at the map and see how much more land they would have today had they accepted this plan instead of going to war.)

So, in summary, Arab Palestinian Nationalists took a hardline position early on, blamed Jewish immigrants for their problems, instigated violence against them, refused a two-state solution, then went to war with the Zionists, losing spectacularly. While they have successfully portrayed themselves as victims to many on the internet who have more sympathy for the underdog, the realpolitik situation of the conflict they started does not seem winnable. There were many points in this conflict where diplomacy, restraint, and concession would have led to a different outcome.

Once the conflict was started atrocities happened on both sides, (most notably by Irgun on the Zionist side,) but let's not forget how it started, or for that matter who can end it today without more lives lost.

From the modern day fraction of territory palestinians now have, and the massive death toll of palestinians, you can see how that has proceeded over time.

Not well, at this rate their constant belligerence and hostility seems to be leading to them losing everything.

Any resistance to this extermination just gets used as justification to continue it.

Again, if modern Israel wanted extermination, they have had the means to do so for some time. I believe you are misrepresenting their position and their goals.