But your argument does not necesarilly mean that the problem was racial. Two modern day conflicts come to mind. The "troubles" between Irish Catholics and Protestants and the strife between Jews and Arabs. Neither is racial, but rather cultural or religious. The Elves seemed to be above being racists. Their cool attitude toward each other seems more akin to how many Americans felt just after World War II about German soldiers. On the one hand the war was over, but on the other hand there was still distrust and hatred (some veiled, some not) over the death of many young men. But this distrust was born of a long and devastating war, not racial prejudice. Not all hatred and/or distrust of another group or culture is based on race. The enmity between Elves and Dwarves was based on particular grievances in which both sides thought that they were in the right. Seemingly the ancient grievances were never fully settled and when we enter the story the distrust has been prolonged by the mutual separation of the two groups - neither getting to know the other. Gimli and Legolas bridge that gap and find more in common and fewer differences than they had imagined. Of course both sides had a penchant for being aloof, secretive, and keeping to themselves until the threat of world domination by Sauron and his minions forced an alliance. Only then was it possible to break this impass.