The Isla Perejil Conflict was an armed, yet bloodless struggle fought between Spain and Morocco in 2002, over a small island off the coast of Morocco, and also off the coast of Ceuta, an exclave of Spain on the African coast. Isla Perejil (or, Parsley Island) is about a tenth of a kilometer and has no population.
English language sources on the conflict are hard to find, but the apparent timeline runs that in July of 2002, the Moroccan army landed some soldiers on the island, with the excuse that the island was being used as a base for drug trafficking. Spain, understandably, didn't believe this at all, and sent in a platoon of Special Forces soldiers to retake the island, which they did quickly and bloodlessly, by calling on the Moroccan troops to surrender through megaphones. A few days later, through the efforts of Colin Powell (who had a lot of other things on his mind in the summer of 2002 than a rock off the coast of Morocco), the two countries agreed to readopt the status quo on the part of the island. Larger issues surrounding the other Spanish territory in North Africa, namely the cities of Ceuta and Melila, were not addressed. The war, therefore, was rather unremarkable in both its execution and results. However, the causes of the Battle of Parsley Island were much more involved.
The first point to be made was that the conflict was between an Arabic nation and a European nation. In fact, the conflict is (as of this writing), the final battle of the Reconquista. After decades or even centuries in which Europe had other foreign policy issues, the conflict with the Arabic and Islamic world became the most important foreign policy issue for both countries. Morocco is known as a very moderate, or at least Pro-Western nation, and yet I think there is a real possibility that with the war in Afghanistan and the coming war in Iraq, the government of Morocco felt some shadows of the old paranoia against the European world. It could also be that they used the conflict over the island as a bloodless, convenient way to shore up their street cred with anti-Western sections of their populace.
The other major lesson of this conflict for me is how tempting rocks and islands are for military and diplomatic conflict. I have read repeatedly that, for example, the Spratly Islands and Falkland Islands have gathered conflicts around them because they were economically important for reasons of fishing or oil rights in the surrounding waters. However, I think that one reason that islands (especially uninhabited ones) have so many competing territorial claims about them is because they provide perfect laboratories for testing the strength and resolve of a rival's government and population. In the case of the Isla Perejil conflict, the Moroccan government was probably surprised at the quickness and decisiveness with which Spain defended this unimportant rock, which gave them an inkling of what type of response they would get from trying any action against Spain's two cities on the Moroccan coast. In some ways, I think that islands are almost an attractive nuisance when it comes to foreign policy --- for while Spain and Morocco have almost a thousand years of history that would lead them to a conflict over Parsley Island, consider the improbability of Denmark and Canada getting in a border dispute. And yet an island of about the same size and utility as Isla Perejil, Hans Island, has had them do just that.
So in this tiny, bloodless conflict between two nations, we see a microcosm of a thousand years of ethnic and religious strife, we see a sign of the developing central issue of foreign policy in the 21st century, and we see a sign of just how easily foreign policy and military establishments can be tricked from rationality over a "disputed territory", no matter how small and insignificant.
Sources on the war are hard to find in English, but:
provide some basic background, while
provides some more details and some good commentary, although the translation is atrocious.