Tafsir of Ash-Shu`ara' 26:96

(They said), and what follows, is a resumption [of the narrative] that serves as an answer to a question arising from what preceded it. It is as if, when it was said: "The idols, the erring ones who worshipped them, and the devils who invited to them were cast headlong," the question was asked: "So what happened?" It was then said: "(They said)," meaning the erring worshippers, "(while they are therein contending)."

This means they are disputing with the idols and devils who are with them, and the sentence is in the state (hal) position. The intent is that they spoke, confessing their error and their immersion in misguidance, while feeling remorse and blaming themselves, all the while being in the process of contending with those who are with them, addressing their gods, since Allah the Almighty renders them capable of speech.