Difference in meaning: "diplomacy" and "foreign affairs"?

Solution 1:

Foreign affairs and foreign policy are terms which describe a country's overall relations with foreign places; the policies in place, incidents that take place, treaties, alliances, trade agreements, military and security co-operation, as well as hostile relationships - even war.

Diplomacy involves the day to day contacts and relations between countries involving ambassadors, government officials, conversations between foreign ministers and others in the relevant governments etc.