Opposition to Israel’s occupation and in particular its settlement enterprise on what the European Union (EU) perceives to be Palestinian/Syrian territories has been a consistent EC/EU policy since 1977 when what was then called the European Community (EC) issued its first declaration against the settlements. While there has been a long historical precedent for EU differentiation in the conflict, the ‘differentiation strategy’ was inofficially operationalized first in 2013. Using the theory of ‘Normative Power Europe’ (NPE) as a framework of analysis, this article argues that while the differentiation strategy has worked in the sense that it has created a normative, legal and in a few cases economic separation in the EU’s dealings with the internationally-recognised Israel and the non-recognised settlements, it has with some very minor, insignificant exceptions, not changed the realities on the ground in Israel-Palestine.