diff --git a/org.eclipse.m2e.pde.target.tests/src/org/eclipse/m2e/pde/target/tests/OSGiMetadataGenerationTest.java b/org.eclipse.m2e.pde.target.tests/src/org/eclipse/m2e/pde/target/tests/OSGiMetadataGenerationTest.java
index fadba4f496..f40884d1a7 100644
--- a/org.eclipse.m2e.pde.target.tests/src/org/eclipse/m2e/pde/target/tests/OSGiMetadataGenerationTest.java
+++ b/org.eclipse.m2e.pde.target.tests/src/org/eclipse/m2e/pde/target/tests/OSGiMetadataGenerationTest.java
@@ -39,7 +39,58 @@
 public class OSGiMetadataGenerationTest extends AbstractMavenTargetTest {
 
 	@Test
-//	@Ignore("currently fails on CI")
+	public void testBadDependencyInChain() throws Exception {
+		ITargetLocation target = resolveMavenTarget("""
+				<location includeDependencyScope="compile" missingManifest="generate" type="Maven">
+					<dependencies>
+						<dependency>
+							<groupId>edu.ucar</groupId>
+							<artifactId>cdm</artifactId>
+							<version>4.5.5</version>
+							<type>jar</type>
+						</dependency>
+					</dependencies>
+				</location>
+				""");
+		assertStatusOk(getTargetStatus(target));
+	}
+
+	@Test
+	public void testBadDependencyDirect() throws Exception {
+		ITargetLocation target = resolveMavenTarget("""
+				<location missingManifest="generate" type="Maven">
+					<dependencies>
+						<dependency>
+							  <groupId>com.ibm.icu</groupId>
+							  <artifactId>icu4j</artifactId>
+							  <version>2.6.1</version>
+							<type>jar</type>
+						</dependency>
+					</dependencies>
+				</location>
+				""");
+		IStatus targetStatus = getTargetStatus(target);
+		assertEquals(String.valueOf(targetStatus), IStatus.ERROR, targetStatus.getSeverity());
+	}
+
+	@Test
+	public void testMissingOptionalDependency() throws Exception {
+		ITargetLocation target = resolveMavenTarget("""
+				<location includeDependencyDepth="none" includeDependencyScopes="compile" missingManifest="generate" type="Maven">
+					<dependencies>
+						<dependency>
+							<groupId>net.sf.saxon</groupId>
+							<artifactId>Saxon-HE</artifactId>
+							<version>10.9</version>
+							<type>jar</type>
+						</dependency>
+					</dependencies>
+				</location>
+				""");
+		assertStatusOk(getTargetStatus(target));
+	}
+
+	@Test
 	public void testNonOSGiArtifact_missingArtifactError() throws Exception {
 		ITargetLocation target = resolveMavenTarget("""
 				<location includeDependencyDepth="none" includeSource="true" missingManifest="error" type="Maven">
diff --git a/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/MavenTargetBundle.java b/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/MavenTargetBundle.java
index f8af883443..dbf36b97cf 100644
--- a/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/MavenTargetBundle.java
+++ b/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/MavenTargetBundle.java
@@ -132,24 +132,29 @@ private static TargetBundle getWrappedArtifact(Artifact artifact, MavenTargetLoc
 		};
 		IMavenExecutionContext exeContext = IMavenExecutionContext.getThreadContext()
 				.orElseGet(maven::createExecutionContext);
-
+		MultiStatus bundleStatus = new MultiStatus(MavenTargetBundle.class, 0,
+				"Some problems where detected while wrapping " + artifact);
 		Path wrappedBundle = exeContext.execute((context, monitor1) -> {
 			RepositorySystem repoSystem = MavenPluginActivator.getDefault().getRepositorySystem();
 			RepositorySystemSession repositorySession = context.getRepositorySession();
 			try {
 				WrappedBundle wrap = MavenBundleWrapper.getWrappedArtifact(artifact, instructionsLookup, repositories,
 						repoSystem, repositorySession, context.getComponentLookup().lookup(SyncContextFactory.class));
-				List<ProcessingMessage> errors = wrap.messages()
+				List<ProcessingMessage> directErrors = wrap.messages(false)
 						.filter(msg -> msg.type() == ProcessingMessage.Type.ERROR).toList();
-				if (errors.isEmpty()) {
+				if (directErrors.isEmpty()) {
+					// treat all items as warnings....
+					wrap.messages(true).map(ProcessingMessage::message).distinct().forEach(msg -> {
+						bundleStatus.add(Status.warning(msg));
+					});
 					return wrap.getFile();
 				}
-				if (errors.size() == 1) {
-					throw new CoreException(Status.error(errors.get(0).message()));
+				if (directErrors.size() == 1) {
+					throw new CoreException(Status.error(directErrors.get(0).message()));
 				}
 				MultiStatus multiStatus = new MultiStatus(MavenTargetBundle.class, IStatus.ERROR,
 						"wrapping artifact " + artifact.getArtifactId() + " failed!");
-				for (ProcessingMessage message : errors) {
+				for (ProcessingMessage message : directErrors) {
 					multiStatus.add(Status.error(message.message()));
 				}
 				throw new CoreException(multiStatus);
@@ -159,7 +164,17 @@ private static TargetBundle getWrappedArtifact(Artifact artifact, MavenTargetLoc
 				throw new CoreException(Status.error("Can't collect dependencies!", e));
 			}
 		}, monitor);
-		return new TargetBundle(wrappedBundle.toFile());
+		TargetBundle bundle = new TargetBundle(wrappedBundle.toFile()) {
+			@Override
+			public IStatus getStatus() {
+				if (!bundleStatus.isOK()) {
+					// TODO see https://github.com/eclipse-pde/eclipse.pde/issues/656
+					// return bundleStatus;
+				}
+				return super.getStatus();
+			}
+		};
+		return bundle;
 
 	}
 
diff --git a/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/shared/MavenBundleWrapper.java b/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/shared/MavenBundleWrapper.java
index 88ebdcdfa7..1b872c4516 100644
--- a/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/shared/MavenBundleWrapper.java
+++ b/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/shared/MavenBundleWrapper.java
@@ -39,11 +39,15 @@
 import org.eclipse.aether.artifact.Artifact;
 import org.eclipse.aether.collection.CollectRequest;
 import org.eclipse.aether.graph.Dependency;
+import org.eclipse.aether.graph.DependencyFilter;
 import org.eclipse.aether.graph.DependencyNode;
 import org.eclipse.aether.graph.DependencyVisitor;
 import org.eclipse.aether.impl.SyncContextFactory;
 import org.eclipse.aether.repository.RemoteRepository;
+import org.eclipse.aether.resolution.ArtifactRequest;
+import org.eclipse.aether.resolution.ArtifactResolutionException;
 import org.eclipse.aether.resolution.DependencyRequest;
+import org.eclipse.aether.resolution.DependencyResolutionException;
 import org.eclipse.core.runtime.Platform;
 import org.eclipse.m2e.pde.target.shared.ProcessingMessage.Type;
 import org.osgi.framework.Constants;
@@ -96,6 +100,22 @@ public static WrappedBundle getWrappedArtifact(Artifact artifact,
 
 		DependencyRequest dependencyRequest = new DependencyRequest();
 		dependencyRequest.setRoot(node);
+		dependencyRequest.setFilter(new DependencyFilter() {
+
+			@Override
+			public boolean accept(DependencyNode node, List<DependencyNode> parents) {
+				ArtifactRequest request = new ArtifactRequest();
+				request.setRepositories(repositories);
+				Artifact nodeArtifact = node.getArtifact();
+				request.setArtifact(nodeArtifact);
+				try {
+					repoSystem.resolveArtifact(repositorySession, request);
+				} catch (ArtifactResolutionException e) {
+					return false;
+				}
+				return true;
+			}
+		});
 		repoSystem.resolveDependencies(repositorySession, dependencyRequest);
 
 		try (SyncContext syncContext = syncContextFactory.newInstance(repositorySession, false)) {
@@ -117,7 +137,10 @@ public boolean visitEnter(DependencyNode n) {
 			Map<DependencyNode, WrappedBundle> visited = new HashMap<>();
 			WrappedBundle wrappedNode = getWrappedNode(node, instructionsLookup, visited);
 			for (WrappedBundle wrap : visited.values()) {
-				wrap.getJar().close();
+				Jar jar = wrap.getJar();
+				if (jar != null) {
+					jar.close();
+				}
 			}
 			return wrappedNode;
 		}
@@ -132,6 +155,18 @@ private static WrappedBundle getWrappedNode(DependencyNode node,
 		}
 		Artifact artifact = node.getArtifact();
 		File originalFile = artifact.getFile();
+		if (originalFile == null) {
+			if (node.getDependency().isOptional()) {
+				visited.put(node,
+						wrappedNode = new WrappedBundle(node, List.of(), null, null, null,
+								List.of(new ProcessingMessage(artifact, Type.WARN,
+										"Optional artifact " + node.getArtifact() + " was not found"))));
+			} else {
+				visited.put(node, wrappedNode = new WrappedBundle(node, List.of(), null, null, null, List.of(
+						new ProcessingMessage(artifact, Type.ERROR, "Artifact " + node.getArtifact() + " not found"))));
+			}
+			return wrappedNode;
+		}
 		Jar jar = new Jar(originalFile);
 		Manifest originalManifest = jar.getManifest();
 		if (originalManifest != null
@@ -174,8 +209,14 @@ private static WrappedBundle getWrappedNode(DependencyNode node,
 						analyzer.setProperty(property, trimValue);
 					}
 					for (WrappedBundle dep : depends) {
-						analyzer.addClasspath(dep.getJar());
-						analyzer.removeClose(dep.getJar());
+						Jar depJar = dep.getJar();
+						if (depJar == null) {
+							messages.add(new ProcessingMessage(artifact, Type.WARN,
+									"Dependency " + dep.getNode().getDependency() + " was ignored!"));
+							continue;
+						}
+						analyzer.addClasspath(depJar);
+						analyzer.removeClose(depJar);
 					}
 					analyzerJar.setManifest(analyzer.calcManifest());
 					analyzerJar.write(wrapArtifactFile);
diff --git a/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/shared/WrappedBundle.java b/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/shared/WrappedBundle.java
index 05137989c0..9f8824a968 100644
--- a/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/shared/WrappedBundle.java
+++ b/org.eclipse.m2e.pde.target/src/org/eclipse/m2e/pde/target/shared/WrappedBundle.java
@@ -48,14 +48,25 @@ Jar getJar() {
 		return jar;
 	}
 
+	DependencyNode getNode() {
+		return node;
+	}
+
 	/** @return the location of the wrapped bundle's files */
 	public Path getFile() {
 		return file;
 	}
 
-	/** @return the messages that where produced */
-	public Stream<ProcessingMessage> messages() {
-		return Stream.concat(messages.stream(), depends.stream().flatMap(dep -> dep.messages()));
+	/**
+	 * @param includeDependent if <code>true</code> includes messages from dependent
+	 *                         items.
+	 * @return the messages that where produced
+	 */
+	public Stream<ProcessingMessage> messages(boolean includeDependent) {
+		if (includeDependent) {
+			return Stream.concat(messages.stream(), depends.stream().flatMap(dep -> dep.messages(true)));
+		}
+		return messages.stream();
 	}
 
 	@Override