Since 1980, Europe’s policy towards the Israeli-Palestinian conflict has served as a major barometer of the Union’s ability to formulate an autonomous and cohesive foreign policy. This paper reflects on the impact of the factors that hamper the effectiveness and coherence of EUFSP towards the Israeli-Palestinian conflict. While there is broad consensus that the EU has some impact in supporting socio-economic development and institution-building in Palestine, its political impact has been negligible. An unfavourable regional and global environment has made the Israel-Palestine question an especially difficult foreign policy dossier. The EU’s failure to fully exploit its limited leverage on this conflict is largely its own making. The case displays the symptoms of EU deficiencies in EU internal consensus, politics and institutional set-up in a particularly harsh manner, and shows how the effectiveness and sustainability of EUFSP often falls victim to the requirement of unity. The result is a dysfunctional stalemate in which policy statements and action (or lack thereof) drift ever further apart.