What should be done to achieve peace and how does EU counteract it?

In any conflict (between persons, businesses or international law subjects) if mediation come into the picture the role of the mediator is to find the deepest needs of each party and try to accommodate them all. Contrary to expectation it can be done as those most important needs do not have to be conflicted. And - certainly - not all needs of all parties may be met.

For example in Israel-Egypt peace deal on the Israel's side it was security, on the Egypt's side it was regaining Sinai Peninsula. Making the last but as a demilitarized zone enabled both parties to accommodate their primary needs (sacrificing some other but it is always a case with agreements).

Equally important is the question if the deal is possible to be executed. And not only forcibly by law (as in civil law cases) but is it generally possible. The famous case of the specious deal was the Versailles Treaty finishing I WW. If the contribution Germany was to pay would have been paid (or even tried to be paid) Germany would gone bankrupt leading to revolution or alike.  There were also no willing parties to try to impose it on Germany which leaded in a way to II WW showing how fictitious was the treaty.

Going back to Israeli-Palestinian treaty what would be the most important needs of the parties was there to be a treaty? For Israel certainly being recognized as Jewish state and security. On Palestinian side gaining the status of a country but is it doable? In contrast to Israel attacked not even 24 hours after independence declaration Palestine would be safe externally at least for starters but internally and specially economically it could be completely other story....
Certainly there are poor states in abundance and it is no reason for them to cease existence, but a newly-created country (had there been one) with people brought up in extremism, 50% with no work (Gaza), accustomed to relatively good conditions of living in sharp contrast to not being accustomed to paying for media and on territory with lots and lots of weaponry may be problematic both for neighbors  (not only Israel, Jordan likewise) and for authorities.

What is the role of EU in it?

here it is

EU pays with taxpayer money for PA administrative staff out of which many do... nothing.
I have already written about debts towards Israel for electricity and other media. Generally speaking PA lives for Israel money when it comes to everyday needs of the people and media and on EU's money when it comes to money itself, specially paying renumerations.
Does a territory with no proper health care, no media supply, high unemployment, lots of weaponry and dependent on others for payments to administration  stand a chance of creating and maintaining state? I very much doubt it.
So, if Palestine was created and - as should be expected - broke relations with Israel how will they supply energy? Will they be willing or able to buy it from neighbors? Possibly not. Will they maintain schools and health care? No. Are they to stay as a country clients of EU at the time when in many European countries pensions are being reduced and maybe soon to be gone? (Eastern Europe specially). Is the aging EU able to support one of the most demographically explosive territories as it does now together with Israel and the USA? What would be the price of not to? Intifada in Europe?
Last but not least - is it not so that "preliminary conditions", breaking negotiations and all alike is in fact escaping by PA authorities, living on (good) European money, the horrifying (to them) perspective of taking responsibility by the state? Are they already hostage of their hateful rhetoric frightened that they may get what they were bragging about and have no idea what to do with?

Tell me what do you think...