The aim of this paper is to shed light on the debate about the European Union (EU)’s role as a state-builder in the case of the Palestinian Territory and in particular the extent to which EU policies and programmes in the area have been able to assist the process of state-building in Palestine in the aftermath of the 1993 Oslo Accords. By analysing the liberal peace and liberal democracy debate on the one hand and the EU’s state-building and conflict resolution policies on the other hand, the paper aims to evaluate the distinctive role of the EU as a state-builder in the case of the Palestinian Territory. Moreover, by focusing on state-building initiatives such as police and security reform, institution-building, judicial reform, as well as support for the health and education sectors, the paper aims to answer the following questions: why have the EU’s state-building strategies employed after the Oslo Accords in Palestine had so little impact? Can this tell us anything that we do not know about the high politics of the conflict? Does this represent a failure of the whole liberal peace-building model (or not)?