Top seeds heading into a five-team tournament and needing to finish in the top two to qualify, Ireland had made life difficult for themselves with a shock 2-0 defeat to Belarus on Tuesday.
That meant they needed wins against both Spain and Italy, with their hopes rising after a dogged defensive performance and an Audrey O’Flynn penalty stroke gave them a 1-0 win against the hosts in Valencia.
But Italy — who also unravelled Ireland’s Olympic qualification bid in Canada in 2008 — were spoilers supreme once more, Elisabetta Pacella nailing a reverse 15 minutes from time to secure a 1-0 victory.
It left Ireland in fourth place, with Italy and Spain going through.
Smith said: “This tournament showed us that we were found wanting in attack and that defensive mistakes at this level usually get punished.”
The upshot for Smith’s side is that only a very unlikely overall victory at this summer’s European championships providing a ticket to the 2014 World Cup, hockey’s second biggest international competition after the Olympics.
Domestically, UL caused the shock of the weekend as Steph Peters starred in their 3-2 Irish Hockey Trophy quarter-final win over Cork C of I at Garryduff.
Elsewhere, Catholic Institute’s 5-0 away hammering of Cork Harlequins gave them a Munster Senior Cup final berth and laid down a marker for the sides’ upcoming league clash.
The Munster men’s title is Cork C of I’s to lose after Andrew Daunt’s crisp backhand shot from a tight angle settled a tetchy game against rivals Cork Harlequins 1-0.
C of I can make mathematically sure when the sides meet next weekend but they also have two games in hand against struggling Bandon to seal the deal.
UCC hammered C of I B 6-0 at Garryduff.