In Hemingway's "Hills Like White Elephants," the setting consists of a café at a train station where the woman and man are drinking and a compelling, attractive background landscape that is dominated by hills, which the girl describes as looking like "white elephants."
Nothing really happens of significance, in terms of overt plot developments, but something significant is about to happen. Whatever is about to happen constitutes the "elephant" in the setting. Yes, there are the hills, but the figurative elephant in the story is the surgical procedure that the woman is about to have. The characters are on their way to somewhere, as indicated by the bags leaning up against the wall. They speak in vague terms, trying to convince each other and themselves that the procedure the woman is traveling to have done will be fine and the outcome will make things better.
The reader may infer that the woman is going to have an abortion. This topic is "the elephant in the room," alluded to but never specifically stated. That the couple is drinking also suggests that the man and woman are seeking to avoid discussing the difficult topic. Near the end, the woman walks to the edge of the station and stares at the hills. The reader can infer that she is thinking about the undiscussed topic. She comes away understanding that the procedure she is about to have will change everything. On the other hand, the man does not have this understanding, as he has not contemplated the hills in the setting as she has.