Oppressors have been using the ‘Amalek’ excuse for nearly one millennium. Functionally it is more or less identical to the excuse that Jews or even Muslims are the descendants of J.C.’s tormentors and therefore violence against them is justified.
If you think that the Bible is telling you to massacre unarmed people, it isn’t a G-d problem. It’s a you problem. There is no good reason to believe that Palestinians descend from Amalek (assuming that he was real, which I doubt), and Judaists are not required to believe that they had to embark on an extermination campaign aimed at him anyway.
Now, let there by no illusions: cleaning out toxic theology never undoes all of the damage that it justified, nor does it always make all of the victims feel better (and not solely because some reinterpretations are based on wishful thinking either), but the point here is that we must never let our oppressors distractingly fool us into thinking that theology is the cause of oppression. Such toxic theology is not going to prevent Jews of conscience from donating or offering anything else that they have to their Palestinian siblings.