The Elves are a race in conflict with themselves. They resemble the Eladrin and it’s likely they share something of their heritage with them. They have lost their Fey connection, which the Eladrin see as sad.
After closing their embassy in protest of the Council’s actions in the Terminus, the Elves have begun an aggressive campaign of sabotage against Human colonies verging at times on outright war. The Elves have tried to keep up relations with the other Citadel races so as not to isolate themselves.
Because of this, the Council has an official policy of nonintervention in the Terminus, though they continue to grant colonization rights to the Human Alliance. Tensions between the Elves and Humans are reaching a breaking point.