Palestinian Prime Minister Salam Fayyad is right to warn Europeans that the Palestinian-Israeli peace process, such as it is, is headed for failure.

He is also absolutely right in his prescription. Israel is not serious about finding an equitable solution to the Palestinian-Israeli conflict; until such time, talks are pointless.

Moreover, while building the institutions of state is an important task and one that Europeans have been particularly keen on supporting, it is not an alternative to ending the occupation. This is a message that Europeans would do well to heed.

For too long the EU has allowed itself to drift along with respect to the Palestinian-Israeli conflict, hiding behind America when it comes to pressuring Israel, yet allaying any guilt for what Europeans, better then the Americans, know is an intolerably unjust situation, by shelling out billions to build a Palestinian state that so far remains a figment of a fevered imagination.

In the realm of this fairy tale, the narrative goes that with enough Western support to construct and run institutions capable of raising taxes, keeping law and order and repairing roads, the Palestinians would eventually magically coax Israel into ending its occupation. But those institutions are there or thereabouts, and Israel is farther than ever from ending its occupation.

On the contrary, since the Oslo agreements were signed, Israel has expanded its occupation, taking more land, building more settlements and entrenching itself deeper, both politically and practically, in East Jerusalem.

Clearly, the problem does not lie with Palestinian capacity building. The problem, now as ever, lies in Israeli motivation. Palestinians do not have the muscle to force Israel to end its occupation. But the world does. And it is now the responsibility of the world, having witnessed one side doing what it can, to pressure the other to comply with its obligations under international law.

The EU, with its rhetoric of law and justice, must lead the way. If Washington is not ready to lead, it may be ready to follow.