"Therefore, remember that formerly you who are Gentiles by birth and called "uncircumcised" by those who call themselves "the circumcision" (that done in the body by the hands of men) - remember that at that time you were separate from Christ, excluded from citizenship in Israel and foreigners to the covenants of the promise, without hope and without God in the world. But now in Christ Jesus you who once were far away have been brought near through the blood of Christ." NIV translation
Paul is reminding the Ephesians (and us as well) that because of God's grace we have righteousness and the ability to enter into God's presence. Paul reminds us that because of our natural birth we were separate from God's people (the Jews) and we were excluded from the promises that were made to them by God. We were not even allowed in His temple to worship Him (see Acts 22 for a look at what happened when Paul was accused of taking a Gentile into the temple). But, because of the blood of Jesus, we have been made a party to his New Covenant and promises.
"For he himself is our peace, who has made the two one and has destroyed the barrier, the dividing wall of hostility," NIV translation
Under the law it was impossible to reconcile Jews and Gentiles but through Jesus it was accomplished. He destroyed the barrier and has made us all a part of His family.
There is constantly one peace plan or another being offered today between Israel and the Palestinians but, as we see here, the only way to have peace is through Jesus Christ.
"by abolishing in his flesh the law with its commandments and regulations. His purpose was to create in himself one new man out of the two, thus making peace, and in this one body to reconcile both of them to God through the cross, by which he put to death their hostility." NIV translation
Jesus, the Prince of Peace, made it possible for there to be peace between Jews and Gentiles. By keeping the Law perfectly, He became the perfect sacrifice and made a way for all of us to have a right relationship with God. That relationship is one of Father and children and allows us to call each other brother and treat each other as such.