Much of the EU’s foreign policy is in practice conducted through its bilateral contractual relations with third parties. These have taken different forms, ranging from the accession process to looser forms of association. Contractual ties are characterised by the delivery of specific benefits governed by mutual obligations, which can thus potentially transform the incentive structure underpinning conflicts within or between non-member states. The aim of this paper is to compare the manner in which the Union’s bilateral relations have affected two key conflict areas in its neighbourhood: the dispute between the Turkish state and the Kurds, and that between Israelis and Palestinians. The two conflicts differ significantly, as do the Union’s relations with the parties. Yet in view of these very differences, a comparison of the EU’s role in each conflict could prove fruitful. It could offer important insights on the potential benefits and effective limits of the Union as a third party actor in conflict settlement and resolution in its turbulent neighbourhood.