can the Elves/Dark elves never enter into Perm alliance?

I have played the Svalts hundreds of times and have always tried to ally with the Ljos every game that they are on the map.....they just wont do it. Ive met all the requirements: the best relations, help in war, give whatever they ask, defensive pacts for 40+ turns.

But they will never ally. Is it hard-coded to never allow it?

they are worst enemies of each other. it could be coded that worst enemies would never enter permanent alliance

It's probably necessary, a certain event forces them to declare war on each other (even in Always Peace games), which wouldn't play well with a permanent alliance.