German Chancellor Angela Merkel's met with Foreign Minister Tzipi Livni on Tuesday prior to her visit to the Knesset. Livni repeated what she has been telling foreign leaders for weeks: Negotiations with the Palestinians will be done in parallel with a war against terrorism. Livni also stressed that Israel's goal in Gaza was not only to stop the rocket attacks, but also to halt Hamas's military buildup. "In dealing with Hamas, and also in relation to Iran, hesitation creates an impression of victory [for them], and that will lead to a strengthening of the extremists at the expense of the moderates," Livni said in the meeting, according to a press release put out by her office. Merkel, on the third and final day of her visit here, also met with President Shimon Peres, who said at the outset of their meeting that Europe and the US needed to work together and present a common front against Iran's attempts to become a nuclear power. Peres said that Iran constituted a real threat to world peace, and that Iranian oil revenue was going to fund world terrorism - including Hamas and Hizbullah. Regarding the Palestinian issue, Peres said Israel could not allow the establishment of an independent Palestinian state and make concessions as long as the security of Israel's citizens was not ensured. For that reason, he said, it was important to strengthen the Palestinian moderates, who he said want peace with Israel. Praising Germany's investment in an industrial park that is planned for Jenin, Peres said that only improving the living standards of the Palestinians by creating jobs and improving education and infrastructure would further peace, not sending weapons or money to the PA, which led to an increase of corruption and bureaucracy. According to Peres's office, Merkel said Germany was interested in taking an active role in furthering economic cooperation between Israel, Jordan and the Palestinians.