I agree that 'demarcation line' doesn't seem right, because that's for things like the border between North and South Korea that have been determined by treaties, agreed to by both sides.
I'm not sure I would use even 'border.' Disclaimer: I only know what I read and hear on the news, I'm anything but fully informed. But just from what partial knowledge I have, it seems that the physical location of things like fences and barriers in and around Israel is actually in flux in some areas, as Israelis keep building the new Berlin-like wall farther out into Palestinian land, as well as building more settlements and fortifying them, often encircling or blocking access to Arab towns or neighborhoods, and thus creating checkpoints where none existed before. Since several of these areas claimed and occupied by both sides are in close proximity (like Jerusalem), and even the larger question of whether a historical border exists, or which one is valid, is (IMO rightly) disputed, I would be inclined to avoid anything suggesting a single de facto border, and say something like checkpoints or control points (between the main Israeli and Palestinian territories) instead. Or in some cases perhaps you could even refer to actual physical features like fences, barriers, walls, etc.
Gaza may be slightly different; I'm not sure the location of its border is so much the subject of dispute as the actions of the parties on either side of it.
Surely a lot of this is what you would have to research in order to write anything more than a passing mention anyway? What words do your sources use? I feel like this is a topic on which it's probably impossible to avoid having a point of view, and it's not unreasonable to express it, as long as you don't use overly emotional language or knowingly misrepresent any facts. But if you're going to allude to it in a serious talk or paper, you will probably need to verify the facts carefully yourself, including the details like what physically constitutes a dividing line in which areas, because of precisely that danger. That is, I'm not sure this is a question about language so much as about careful, accurate description.