There are several aspects of the setting in this story that carry meaning or produce significant effects. First, the young woman called "Jig" and the "American" man are at a train station, a place of coming and going but not belonging. They are on their way to somewhere and coming from somewhere, but for now, they are in a kind of limbo, just like they find themselves in an emotional limbo in their relationship. Second, the couple are in a country, Spain, to which they are not native. The man is "American," and Jig, for example, does not speak Spanish—she needs him to read and translate the words on the beaded curtain at the cantina for her. They are travelers, out of their comfort zones and familiar spaces, just as they are emotionally as well.

Third, the physical topography of the area, with its hills in the distance, evidently reminds Jig of white elephants. Jig's reference to a "white elephant" is an allusion to an old tale about the king of Siam and how he would give a white elephant as a gift to someone he didn't like. It seemed like a really nice gift, but because the elephant was sacred and could not be put to work, it would bankrupt the person who had to pay for its expensive care. Thus, the look of the hills in the setting is forcing Jig to think of something that is ultimately harmful even though it may seem like a good thing.

Perhaps the white elephant is her relationship with the American: it seems good until her unplanned pregnancy helps her to understand that they are not really a good fit for one another, and they become alienated from each other (just as they are alienated by the other factors in the setting).

"Hills Like White Elephants" is a story about the "lost generation," a term used by Hemingway explicitly in his novel The Sun Also Rises to describe the young adults of the period immediately following the first world war. The characters in his works about this period exemplify this by being rootless expatriates, lacking close and permanent ties to other places or people. 

The setting of "Hills Like White Elephants" in a railroad station exemplifies this sense of being "lost." A railroad station is not a permanent place anyone inhabits but a place one passes through in transit to somewhere else. This lack of permanence is emblematic of the relationship between Jig and the man. Rather than getting married and raising their child, Jig is preparing to have an abortion, and the couple is drifting apart. Their efforts to be free of anchors to place, community, and person have left them adrift and unmoored, constantly in transit between places but never becoming part of those places. 

As symbols, the hills which resemble "white elephants," the treeless railroad tracks, and the station, represent the characters and their relationship as they imbue the narrative with meaning.

In his typical minimalist style, Ernest Hemingway's story, "Hills Like White Elephants" is wrought with ambiguity as the narrative consists of apparently trivial conversation between a young woman named Jig and an unnamed man.  Thus, in order to understand the implications their conversation, the reader must infer meaning from the symbols of the setting.  For one thing, it is Jig only who bothers to look to the horizon, calling attention to the large hills,white in the sun: 

"They look like white elephants," she said.

"I've never seen one," the man drank his beer.

"No, you wouldn't have."

That the man does not acknowledge or care to look at the "white elephants" indicates his self-absorption and lack of interest beyond anything that concerns his immediate desire which is apparently drinking a beer.  Of course, the symbolism of the hills extends  meaning to the man's uncaring and selfish feelings about Jig's pregnancy and his desire to be rid of their "white elephant" that threatens his independence and the careless relationship that they now have.  In Jig's use of the word skin in reference to these hills, there is also the added mimicking of the white hills as her belly that may go to "have the air let in" with the "awfully simple operation." Significantly, also, Jig knows that the man's protestation "If you don't want  to, you don't have to" is empty and worthless like a white elephant.  She replies,

"...But if I do it, then it will be nice again if I say things are like white elephants, and you'll like it?" 

Similarly signficant in meaning, the railroad tracts mimic the separation of attitude and thought between Jig and the man, indicating that there is no compromise--Jig must either decide to have an abortion or she will lose her paramour; either way, however, their lives will not come together.  The barren hillside signifies the future ahead for her:

They sat down at the table and the girl looked across at the hills on the dry side of the valley and the man looked at her and at the table.

With the barren hills in the distance, the man's looking only at the girl and the table imports that he continues in his narrow and selfish point of view while she sees beyond to their meaningless future.

In "Hills Like White Elephants," how do details of setting and physical action contribute to our understanding of the characters?

Hemingway uses the setting as a metaphor for the couple's relationship. What the setting tells us is that, while both parts of the view are part of the same landscape, the parts are are divided from each other. What the metaphor of the setting tells us about the characters is that, while they are a couple and metaphorically part of the same landscape, they are as divided as the landscape. This foreshadows the unwritten outcome of the debate they are having and of their relationship. It also tells us that one individual in the couple represents a position that equates to a landscape with no trees and no shade (but this does not indicate which character this is). It also tells us that the characters have perspectives and precepts that make them like two sets of train tracks going separate ways.

On this side there was no shade and no trees and the station was between two lines of rails in the sun.

Their physical actions display and reinforce their separateness, a characterization that overrides and belies the words they might speak. While saying how he only wants Jig to agree to the "operation" if she wants to, the man goes into the bar alone and has a second Anis (probably without water) alone and watches the other people being "reasonable" while they await the coming train. This, of course, implies that the man perceives Jig as unreasonable.

They were all waiting reasonably for the train. He went out through the bead curtain.

Similarly, when Jig walks to the end of the station to look at the scene and the Ebro, she is demonstrating her separateness from the man. So while she says she is being amused, she is really being driven apart from the man:

'And we could have all this,’ she said. ‘And we could have everything and every day we make it more impossible.’

In "Hills Like White Elephants," how does setting reveal aspects of the plot?

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.

In "Hills Like White Elephants," how does setting reveal aspects of the plot?

The train station is the thing that first comes to my mind. The two main characters are on a journey (both literal and metaphoric). There's also the landscape and the references in the text to the fertility and infertility of the soil. The young woman, Jig, doesn't speak Spanish, which may help to show that she's apparently in a more vulnerable, less empowered position than the male character. Those three items show a connection between the setting and the meaning of the story.

In "Hills Like White Elephants" by Ernest Hemingway, how does the setting develop the central idea?

It is with dialogue and setting that the minimalist Ernest Hemingway skillfully creates his powerful tale of two people together, yet separated ideologically. For instance, with her perception of the white hills as elephants, Jig's preoccupation with her pregnancy becomes apparent. Also, her more sensitive nature and intuitive mind are evinced in her remark,

"They're lovely hills,...They don't really look like white elephants.  I just meant the coloring of their skin through the trees.

Her ability to interpret nature allows Jig to internalize and perceive the operation as a life-changing event. Considering what is involved, she looks around and notices

fields of grain and trees along the banks of the Ebro.  Far away, beyond the river, were mountains.  The shadow of a cloud moved across the field of grain and she saw the river through the trees.

Just as she can observe nature and its movements, Jig can conceptualize the "simple" operation of which the man speaks as a momentous, an act that will leave them not, as the man argues, "just like before." Thus, in contrast to Jig, the man does not perceive the hills as white elephants; and, even when he looks down the railway, he cannot see the train. For, he reduces everything to a mechanical process as he thinks of things only in steps toward an end.  He even admits to not thinking about the future: 

"I love it  now but I just can't think about it.  You know how I get when I worry."

Considering only the apparent facts, the man tells Jig that after the operation, they will be fine.  After all, the "it's perfectly simple."  However, Jig knows that "once they take it away, you never get it back."  Then, she "looked across at the hills on the dry side of the valley."  But, the myopic man merely "looked at her and at the table." 

As the time nears for the arrival of the train, the man significantly says that he must take the bags "to the other side of the station" as, indeed, he is on the other side of considering the abortion: Jig does not want to have one.

In his essay, "Hills Like White Elephants": "Hills Like White Elephants," Robert Johston states,

With swift, sure strokes, without a wasted word or motion, Hemingway creates a taut, tense story of conflict in a moral wasteland.

This moral wasteland is conveyed through Hemingway's skillful use of setting:  barren hills, dry, deserted railways running through "the country [that] was brown."