German Chancellor Angela Merkel called on Prime Minister Binyamin Netanyahu to slow down settlement construction on Friday.

The Wall Street Journal quoted Merkel as saying following a meeting with Palestinian Authority President Mahmoud Abbas, "We call on Israel to opt for a restrained approach in its settlement policy. I have said this repeatedly in talks with Prime Minister Netanyahu, because we must not put at risk the talks."

Merkel also ensured Abbas that when Germany's new governing coalition was formed it would continue to provide aid to the Palestinian territories.

"We have always advocated a two-state solution. We have always advocated aiding and supporting the Palestinian Territories, advancing the peace process, advancing economic development and I am pretty sure we will conduct our foreign policy with this continuity," DPA quoted Merkel as saying.

Abbas called on Israel to match the Palestinians seriousness in peace talks.

"I stress the Palestinian side is very earnestly trying to conduct these talks despite the challenge of settlements. We should accept this historic opportunity. We appeal to the Israeli side to seize this chance," he said at the joint press conference with Merkel in Berlin.

Merkel stated that the Palestinians had made an up-front concession by suspending efforts for unilateral recognition at the United Nations and Israel should match the concession by restraining settlement construction.

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