The government of Prime Minister Binyamin Netanyahu had no convincing reason of substance to be upset about the Swedish request that the Council of the European Union endorse a Palestinian state with "east Jerusalem as its capital" - wording watered down in the final EU text issued Tuesday. Of course the wording of the initial resolution could have and should have been less hostile to Israel, e.g. by explicitly recognizing west Jerusalem as Israel's capital and doing more than merely "taking note" of Netanyahu's settlement freeze. But what does Netanyahu expect? Basically, the proposal reiterated known European and international positions. And Israel's recent behavior in Jerusalem - the disastrous house expulsions in Sheikh Jarrah, excavations at Silwan/City of David and expansion into disputed territory at Gilo - essentially invites a reprimand. Still, there is little likelihood of real European pressure on Israel. The EU has limited clout as a diplomatic player in the Arab-Israel conflict. Conceivably, that situation may soon change, with the advent of an EU president and foreign minister. But for the moment, we simply don't know to what extent this new system will enable the union of 27 European states to better formulate and implement a foreign policy. Meanwhile, we recall that last July, outgoing EU foreign policy coordinator Javier Solana proposed that the UN plan unilaterally to create and recognize a Palestinian state - seemingly a much more far-reaching initiative - without generating more than an international yawn. SWEDEN'S thwarted initiative represented the dying gasp of the old EU system under which the rotating state president can take all kinds of bizarre and ultimately pointless diplomatic initiatives. Last January, the Czech Republic held the presidency during Israel's incursion into Gaza: Due to inexperience and a heavy pro-Israel tilt, it managed to neutralize EU influence almost completely. Then there was French President Nicolas Sarkozy's "Mediterranean Union." In Sweden's case, a government that has demonstrated a clear pro-Palestinian tilt was trying at the 11th hour to influence future EU policy with proposals that, however logical, were guaranteed not to find favor in either Jerusalem or Washington. We have already noted Jerusalem's response. As for Washington, even the watered-down resolution will certainly not render easier the efforts of Obama administration peace emissary George Mitchell to restart negotiations based on what Netanyahu has - rather than what he has not - done regarding settlements and Jerusalem. The PLO places exaggerated faith in European support and, accordingly, may now stiffen its refusal to negotiate. In this regard, the Swedish initiative represents the near total absence in recent months of close US-EU coordination regarding efforts to resolve the conflict. Remember the Quartet? It represented president George W. Bush's relatively successful effort to maintain such coordination, even as the Bush administration did far too little on the diplomatic front. Now the Obama administration has tried harder diplomatically yet accomplished equally little, and without effective coordination with the Europeans to boot. In this regard President Barack Obama, too, "deserves" this Swedish initiative. Finally, if Netanyahu took umbrage at the Swedish attempt to create a Palestinian capital in east Jerusalem, this cannot but return us to a fundamental dilemma regarding the extent of our prime minister's "conversion" from Greater Land of Israel Revisionist to champion of the two-state solution. Surely Netanyahu by now understands that a genuine solution will require the ceding of Jerusalem's Arab neighborhoods to a Palestinian state. In this context, he seemingly says and does the right thing - the Bar-Ilan speech, removing checkpoints, the settlement freeze, confrontations with the settlers. Yet in parallel he leads us, through innuendo and body language, to understand that all this is being undertaken for very different reasons - to make the Americans happy so they'll keep their eye on the Iranian threat, "prove" the Palestinians don't want peace and keep Labor in the coalition - rather than to extricate Israel from a demographic disaster that threatens its future integrity as a Jewish state. So the settlers get reassurances and concessions and the creeping and utterly counterproductive Judaization of east Jerusalem continues. Thus the Swedish initiative can be seen as metaphor for many things. Yet, however understandable the frustrations it reflects, I doubt the initiative will be seen in the long term as a positive step toward peace. The writer is coeditor of the bitterlemons family of Internet publications. He is former director of the Jaffee Center for Strategic Studies at Tel Aviv University. This article was originally published by www.bitterlemons.org and is reprinted with permission, with minor changes by the author.