Chancellor Angela Merkel on August 27 urged Israel to stop building Jewish settlements as a way for resuming peace talks with the Palestinians.
At a meeting with Israeli Prime Minister Benjamin Netanyahu, Merkel said right now was a "good time" to restart peace talks between Israel and the Palestinians. She said the stoppage of new settlements was a key "building block" to resuming the talks.
Netanyahu said Israel was open to talks with the Palestinians. But he said no decisions on the issue have been made.
Israeli-Palestinian peace talks were suspended late last year as Israel entered its own election period.
It was Netanyahu's first official visit to Germany after being reelected prime minister in March.
The main purpose of Netanyahu's four-day trip to Europe, which started on Monday, was to seek support for a tougher stance against Iran.
"Germany must take the lead in harsher sanctions against Iran," Netanyahu said after meeting with German President Horst Koehler on Wednesday.
After meeting with Netanyahu, Merkel said Iran might face new sanctions in the energy and financial sectors if it does not show a willingness to negotiate on its nuclear program by September.
