German President Joachim Gauck asked Israeli Prime Minister Benjamin Netanyahu on Wednesday for a gesture on the issue of West Bank settlements, which the international community define as illegal.
"Germany and Europe would be grateful for any sign on the settlements issue. We regard this issue as key for the peace process," a presidential spokesman quoted Gauck as telling his host.
But Gauck assured Netanyahu that the close relationship between the two countries would remain steadfast.
"Our friendship is not in danger," he was quoted as saying.
"Gauck and Netanyahu agreed that we share common values even though we have different opinions on some issues," the German spokesman said.
Israel-Palestinian peace talks have been stalled since late September 2010 over an intractable dispute about settlements.
Palestinians say they will not resume negotiations unless Israel freezes settlement construction and agrees to base any future talks on the lines that existed before it captured the West Bank in the 1967 Six-Day War.
Israel says the settlement issue should be negotiated as part of a permanent peace accord and wants to retain sovereignty over the most heavily populated clusters of its West Bank enclaves.
There was no joint statement or press conference after the afternoon talks in Jerusalem, but an Israeli official said the meeting "took place in an excellent atmosphere."
Germany, considered the European country closest to Israel, has repeatedly expressed its strong disapproval of the pro-settlement policies of the Netanyahu government, which leans heavily on the settler movement for its support.
Gauck is to visit the West Bank on Thursday for talks with Palestinian president Mahmud Abbas and prime minister Salam Fayyad at their Ramallah headquarters.