Abstract. Over the past three decades, a one-state reality with unequal rights has become entrenched in Israel/Palestine. It has thus become conspicuous that the approach agreed upon in Oslo in the mid-1990s has failed to resolve the Israeli-Palestinian conflict. This has accentuated the dilemmas of Europe’s approach to advance Israeli-Palestinian peace. The EU and its member states have continued to entertain the mantras of a negotiated two-state solution and intra-Palestinian reconciliation – while remaining in the back seat when it comes to shaping dynamics on the ground and erecting hurdles for themselves to make progress towards reconciliation. As a consequence, the chasm between European rhetoric on conflict resolution and conflict realities on the ground has ever more widened. The article analyzes European policy objectives and instruments concerning Israel/Palestine and explains why the Europeans have not been able to assume a more prominent and effective role with regards to realizing their proclaimed objectives. It also discusses prospects for European policy making on Israel/Palestine as well as options for cooperative or complementary approaches with other international actors, such as Russia.