Prime Minister Binyamin Netanyahu and German Chancellor Angela Merkel did not even try to hide their disagreement over settlement building during a press conference in Jerusalem on Monday, with Merkel reiterating her position that construction should stop, and Netanyahu replying that settlements were neither the root of the conflict nor what was preventing an agreement.

“The settlements are not compatible with Israel’s obligations under the road map,” Merkel said at the press conference, adding that it would be better for negotiations if the road map-mandated freeze on settlements were honored.

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According to diplomatic sources, in her meeting with Netanyahu beforehand she said the situation in Egypt underscored the importance of moving forward swiftly on the diplomatic process with the Palestinians.

Merkel arrived Monday at the head of delegation of nine additional German cabinet ministers for a joint Israeli-German government session meant to underscore the close ties between the two countries.

It was the third such meeting since 2008.

Netanyahu said in his bilateral meeting with Merkel that the settlements were not the obstacle to peace, and expanded on the theme before the press.

He referred to leaked Palestinian documents published by Al-Jazeera last week and said they showed the Palestinians had conceded in negotiations with the Olmert government that the Jerusalem neighborhood of Ramat Shlomo would remain in Israeli hands in a future agreement.

But, he said, this did not prevent the PA from stirring up an international crisis when it was announced during US Vice President Joe Biden’s visit here last year that Israel had plans to build two new streets in the neighborhood.

“They caused a huge crisis with the Americans and the Europeans over plans to build in a neighborhood they already gave up in negotiations, and said we were hindering the negotiations,” he declared.

There is no doubt the settlement issue must be addressed during talks, Netanyahu said, “but what is the truth? The clear and simple truth is this is not the reason for the conflict, or preventing the end of the conflict.

It is an important issue for discussion, but it is not the problem.

“The problem is that they have to recognize the fact that there is a Jewish state here, period; that it will have borders, period; that it has a capital, period. That is the root of the problem.”

On Iran, the prime minister and Merkel seemed more or less on the same page, even though Netanyahu spoke more forcefully about the matter.

“Iran is working everywhere to destroy the peace, to destroy stability – in Afghanistan, Iraq, Yemen, in Lebanon, in Gaza, in Africa,” Netanyahu said.

He added that if Iran was capable of doing all this without nuclear capabilities, one could only imagine what it would do with such capabilities.

As a result, he said, there was a need to tighten sanctions.

“But in order for those sanctions to convince Iran to abandon its nuclear program, it needs to know that if the sanctions don’t work, there is another option,” Netanyahu said, referring to the military option. “And the more that option is believable, the less will be the need to use it.”

Netanyahu thanked Merkel for what he said was her “clear stand on this matter – consistent and strong, a position that is needed more now than ever.”

Merkel said Germany was ready to “face up to our responsibilities regarding Iran. We know it constitutes a threat, not only Israel, but also for the world.”

The chancellor said Berlin had continuously supported sanctions and was taking steps to ensure their implementation.

The other German ministers who took part in Monday’s joint cabinet meeting were Interior Minister Thomas de Maiziere; Education Minister Annette Schavan; Economics and Technology Minister Rainer Bruederle; Economic Cooperation and Development Minister Dirk Niebel; Minister for Youth, Women, Family and Pensioner Affairs Kristina Schroeder; Transportation and City Development Minister Peter Ramsauer; Agriculture and Consumer Affairs Minister Ilse Aigner; Environment Affairs Minister Norbert Roettgen and State Federal Minister Eckart von Klaeden.

In addition to the joint session, the ministers also held bilateral meetings with their Israeli counterparts.

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