Israeli Prime Minister Benjamin Netanyahu clashed with German Chancellor Angela Merkel on Thursday over new Jewish settlements but both were at pains to stress their unshakable ties.
On a visit that had risked being overshadowed by the diplomatic storm that has strained relations with close allies, Netanyahu joined Merkel for a meeting between most of their cabinet ministers after a private dinner late Wednesday.
Merkel told reporters at a joint news conference that Germany, like other Western partners, hoped Israel would drop plans to build more than 3,000 settler homes on a strategic strip of occupied Palestinian land.
"On the question of settlements, we are agreed that we are not agreed," she said with a wry smile, looking at Netanyahu.
Netanyahu insisted his settlements policy did not mark a radical new departure, and were merely picking up where other Israeli governments had left off. He said the homes would remain even in a two-state solution with the Palestinians.
"The curious thing is that most governments who have looked at these suggestions, these proposals over the years, including the Palestinians themselves as revealed in leaked documents, understand that these blocs, these arrangements are going to be part of Israel in a final political settlement of peace," he said.
"I think the root cause of the problem is not the settlements. I hope that we can engage at least part of the Palestinian people in a discussion about mutual co-existence, about mutual peace."
Netanyahu said Israel would continue to seek an accord with the Palestinians.
"Israel remains fully committed to achieving peace with the Palestinians based on the principle of two states for two peoples," he said.
"I haven't given up on it."
The Israeli leader arrived from Prague where he had singled out the Czech Republic for its "friendship and courage" as the only European state to have opposed a Palestinian status upgrade at the United Nations last week.
It was Netanyahu's first European visit since the UN vote.
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Setting a bitter tone for the Merkel meeting, Netanyahu had told Thursday's German daily Die Welt that he was "disappointed" that Berlin had abstained from voting at the UN despite reported pleas by Israel to reject the Palestinian resolution.
But at the press conference, he repeatedly thanked Germany and Merkel personally for unwavering support of Israel's security.
"I want to make it absolutely clear that I have no doubt whatsoever about your commitment to Jewish security and the well-being of the Jewish state," he said.
France, Britain, Spain, the European Union, Denmark, Sweden, Australia and Egypt have all summoned the Israeli ambassadors to protest the settlement plans, which also drew criticism from Russia and Japan.
Germany, long considered Israel's closest ally in Europe with ties rooted in the country's bid for atonement over the Nazi Holocaust, stopped short of such a move.
But Merkel has sharply condemned the policy as potentially torpedoing hopes for peace and the chance of a viable, contiguous Palestinian state.
She avoided such barbed language at the press conference, and renewed her vehement support for Israel's recent military action in Gaza in response to repeated rocket fire.
Merkel also repeated a call to resume peace talks.
"In our view, we need to try and return to negotiations and unilateral measures should be avoided," she said.
The Israeli-German joint cabinet meeting, the fourth of its kind, was billed as focusing on "innovation, education and sustainability".
The ministers agreed to hold a German-Israeli job training conference next year as well as to boost cooperation in the areas of solar energy, energy efficiency and cybersecurity.
Netanyahu and German Foreign Minister Guido Westerwelle later laid wreaths in their national colours at a Holocaust memorial at a Berlin railway station from which the Nazis deported thousands of Jews to the death camps during World War II.
Westerwelle pledged the government would keep up the fight against anti-Semitism in Germany.