This work brings cultural depth to Hybrid Craft research by exploring Tatreez (Palestinian Arab embroidery) as a medium for Indigenous interaction design. We conducted four participatory workshops with 23 Palestinian, Arab, and Muslim individuals, incorporating traditional hand-stitching, digital embroidery, and reflective interviews. We investigate how digital design and machine embroidery can support handmaking and enable interactive Tatreez with e-textiles that connect to digital archives for storytelling and remembrance. We present a sampler book with embroidered braille, conductive threads, and seamless touch-sensing, bridging cultural heritage and accessible interaction. Our qualitative analysis highlights design opportunities (including co-crafting with machines and multisensory interaction) and design considerations for HCI such as respecting collectivist participation modes, decolonizing Hybrid Craft, and making politics in diasporic and marginalized communities. This work expands Hybrid Craft in HCI beyond neutral and Western norms, foregrounding cultural pride while offering practical insights for conducting user studies with underrepresented groups.