Israel–Palestine and Europe’s neighbourhood: power, principles and responsibility

At this year’s State of Europe event, I had the privilege of initiating and facilitating a dialogue on the evolving dynamics of the Palestine–Israel–Europe relationship — a conversation that felt both timely and essential. Taking place just days after the announcement of the ceasefire, the room carried a palpable mix of relief, exhaustion, and cautious hope. Through the partnership between the EPICON initiative of the Candid Foundation and Friends of Europe, the session created space to reflect on what this fragile moment might mean for Europe’s role in the region — and how principle, policy, and public pressure could begin to align toward a more sustainable future.

The ceasefire itself was, in many ways, a testament to international pressure. The mobilisation of European publics, and eventually their governments, to demand action, even symbolic, played a part in halting the violence. Yet the moment also underscored a deeper reckoning. The war in Gaza and its fragile aftermath have become a defining test of Europe’s role in the Middle East.

For too long, the European Union has been viewed as a donor and observer – generous with aid, but cautious with influence. Now, it faces a historic choice: to remain reactive or to step into a more assertive and principled political role, one that matches its economic weight and its stated commitment to peace, accountability, and international law.

Despite being Israel’s largest trading partner and one of the most consistent supporters of Palestinian development, the EU has struggled to translate its material leverage into meaningful political influence. The war has not only deepened regional fractures but also revealed Europe’s structural limitations, policy inconsistencies, and the erosion of trust among both Palestinians and Israelis.

Europe’s foreign policy machinery, though intellectually robust, is often stymied by the need for unanimous decision-making. This ‘consensus trap’ delays timely action and allows more agile actors on the ground to exploit divisions among member states. While institutions within the EU produce sophisticated policy analyses and funding instruments, these tools frequently remain underutilised, disconnected from real-time diplomacy, or rendered ineffective by political hesitation. The result is a foreign policy apparatus that lags behind unfolding crises; reactive where it should be strategic, and fragmented where it should be united.

This lack of cohesion and decisiveness has eroded Europe’s credibility with Palestinians, while one-sided declarations and public mobilisation have alienated segments of the Israeli public. Palestinians increasingly see Europe as unable to uphold its own standards on human rights and international law. The EU’s failure to impose meaningful consequences in the face of well-documented violations during the war in Gaza has only deepened this mistrust. Meanwhile, public and institutional scepticism toward the EU continues to grow in Israel, with a majority perceiving Europe as adversarial rather than impartial – further weakening its capacity to influence Israeli policy or political debate.

Within this moment of paralysis, there is also an opening. The current lull in violence, however fragile, offers a rare opportunity not for an immediate resolution but for laying the groundwork toward one.

Accountability must be at the heart of this effort. The assumption that Israel responds only to incentives has been proven false time and again. Decades of unconditional engagement have led not to compromise but to growing impunity – marked by settlement expansion, annexation efforts, and the persistent refusal to enter meaningful negotiations. The recent advisory opinion of the International Court of Justice, which found that Israel’s occupation and governance in the Palestinian territories are illegal and comparable to apartheid, provides a clear legal and moral basis for action.

States that are not party to the conflict, including members of the EU, have an obligation not to return to the status quo of 6 October, but to maintain pressure to ensure respect for international law across all territories. Recent weeks have shown that the ceasefire remains fragile and that settler violence continues to escalate in the West Bank. The EU must therefore sustain its pressure on the Israeli government and use its influence to encourage a shift toward a different and more responsible political path. Such pressure would ensure the important transition to the next phases of the Trump Plan.

At the same time, Europe must recalibrate its engagement with Palestinian institutions. Any meaningful reconstruction, and ultimately any sustainable peace process, depends on the emergence of legitimate and representative Palestinian leadership. This requires active support for national consensus-building, the renewal of democratic institutions, and the creation of a unified system of governance that bridges Gaza and the West Bank rather than perpetuating their division.

Current diplomatic frameworks, such as Trump’s 20-point Plan, fall short of this vision. Such an approach risks entrenching fragmentation instead of fostering stability. Europe, working alongside regional partners, must help revise these frameworks — anchoring them in principles of self determination that recognise Palestinians not as passive recipients of aid, but as political actors in a process of state-building under international support.

The experiences of Bosnia and Herzegovina and Kosovo offer instructive precedents: both placed accountability and interim international oversight at the heart of post-war state formation. Similarly, the EU should not only commit to funding Gaza’s reconstruction, but also insist on a rights-based framework — one that, as learned in Bosnia, links recovery to justice, including the right to compensation, the right of return and the formation of local institutions as integral components of rebuilding a post-war reality.

The coming year will also see elections in Israel – a critical inflection point. While the current government has consistently rejected the two-state solution and shown no willingness to compromise, political shifts remain possible. Europe can and should use its influence to join the Israeli political debate, making clear that future diplomatic and economic engagement will align with principles of peace, accountability and mutual recognition. Engaging the Israeli mainstream – increasingly uneasy with ultranationalist policies yet still concerned with security issues – is essential, as this is the constituency that will ultimately determine Israel’s political direction.

Drawing lessons from Europe’s own history of post-conflict reconstruction – from Berlin to Bosnia to Belfast – there is a clear need to invest not just in recovery, but in the infrastructure of peace. This includes long-term funding for cross-community partnerships, local leadership development, civil society initiatives, and economic regeneration. Efforts can begin with the partnership on humanitarian aid and reconstruction, as exemplified in by the work of various organisations such as the Arava Institute (and its JHG initiative). The success of the International Fund for Ireland in the decade prior to the Good Friday Agreement offers a compelling model: by supporting thousands of grassroots projects over a decade, it helped foster trust, interdependence and political will, laying the groundwork for lasting peace.

Such a model is urgently needed today. While over 180 organisations across Israel and Palestine are working on education, humanitarian aid and dialogue, these peacebuilding efforts remain chronically underfunded, fragmented and disconnected from a larger strategic framework. Europe can and must provide this framework. But doing so requires moving beyond short-term humanitarian relief and towards structured, sustained investment in coexistence and state-building.

Any sustainable resolution must be multilateral rather than bilateral. The recent war was not a confrontation between Israel and Hamas alone; it was part of a wider regional conflict involving Iran, Hezbollah, the Houthis, and international mediators. Europe should not return to the Oslo era model of limited bilateralism but instead promote regional frameworks that combine Arab financial ownership, European governance standards, and international legitimacy.

History offers a clear lesson. The Marshall Plan demonstrated that rebuilding societies after war is not only a moral obligation but also a strategic investment. Stability, prosperity, and shared governance beyond one’s borders reinforce international order, strengthen alliances and enhance Europe’s strategic influence.

The future of Gaza must be anchored in a broader economic and political architecture that connects it to regional trade corridors, green energy networks and inclusive development pathways. In light of these realities, Europe stands at a crossroads. It can remain a cautious observer, expressing concern, providing aid, and urging restraint, or it can step forward as a committed stakeholder with the credibility and conviction to lead. Doing so will require political courage, institutional coherence, and a genuine adherence to the principles it so often proclaims.

If taken seriously, this fragile moment of relief could become the foundation for a just and sustainable peace, not only for Israelis and Palestinians but also for Europe’s renewal as a principled global actor. The choice before the European Union is clear: to reaffirm its legacy as a builder of peace through partnerships, shared institutions and the rule of law, or to remain a bystander to history. The consequences of inaction would be felt far beyond the Middle East.

The views expressed in this #CriticalThinking article reflect those of the author(s) and not of Friends of Europe.