Of the many reasons for the KDF/Fed war the greatest and most ignored is the simple fact that the Federation essentially spat on the Khittomer Accords when the Empire requested aid in their war with the Gorn when they had evidence of Undine infiltration. The Federation ignored that evidence and assumed that the High Council was jumping at shadows as they did before the Dominion War with the fight with Cardassia.
The Federation has made no effort, no gesture whatsoever to correct this and now it is much too late. In the eyes of the Empire those that lead the Federation are honorless, holding no value or respect in the alliances they make..
All of this os true. The KDF took action and was rebuked by the Undine infiltrated feds. The KDF decided to take the "standard fed" approach of "doing for the good of the galaxy" anyways. The game needs to focus on the feds being infiltrated and have the KDF as the rough but take-action hero against the Undine.