German Chancellor Angela Merkel on Saturday advocated a "comprehensive diplomatic initiative" over Iraq that would involve the country's neighbors and contribute to stabilizing the Middle East. Germany hopes to help tackle the region's problems during its presidency of the European Union and Group of Eight next year. Merkel made her comments in her weekly video podcast, ahead of meetings over the coming days with the leaders of Egypt and Israel. Merkel said a report on the situation in Iraq by a bipartisan US panel under Republican James A. Baker III and Democrat Lee Hamilton was "of particular significance." "I support particularly a comprehensive diplomatic initiative in which Iraq would also include its neighboring states and through which a contribution could be made to stabilizing the Middle East as a whole," Merkel said. However, she did not refer specifically to the Baker-Hamilton panel's call for the United States to engage adversaries Iran and Syria - a course the Bush administration has thus far rejected. Merkel underlined her commitment to a "stable, independent Lebanon." "All must make a contribution to that - particularly Syria, which from my point of view so far is not fulfilling sufficiently its obligations," she said. "We naturally also need to safeguard Israel's right to exist - all must also recognize this, otherwise there will be no peace in the Middle East," Merkel added. "We also need a Palestinian state in which the Palestinians can sensibly develop economically and culturally." Berlin is hoping the Quartet of international players trying to promote Middle East peace - the United Nations, the United States, the European Union and Russia - can lead efforts to restart the stalled process.