German Chancellor Angela Merkel on Saturday welcomed new interest among Arab nations in helping resolve the Israeli-Palestinian conflict and said she is optimistic about prospects for new UN action on Iran. Germany holds the presidency of both the European Union and Group of Eight, and Merkel has made helping nudge forward stalled Middle East peace efforts a priority. Merkel said Arab countries are now showing new readiness to do so themselves. "Without regional efforts, it will be very difficult to solve from a distance the conflict between the Palestinians and Israel, so I see this as a sign of hope," she said. Merkel welcomed the efforts of an "Arab Quartet" of Jordan, Saudi Arabia, the United Arab Emirates and Egypt, and the Saudi drive to bring together the feuding Palestinian factions that resulted in their Mecca power-sharing agreement - "although we can criticize the results." Hamas has resisted international demands that include recognizing Israel. "Naturally, the Mecca agreement is not yet something that corresponds with our ... demands, but it can be a beginning if we continue in the right direction," Merkel said at a European-Israeli conference organized by Germany's Axel Springer publishing house. On Iran, Merkel underlined the importance of bringing veto-wielding UN Security Council members Russia and China behind action against Iran over its refusal to suspend uranium enrichment. Negotiations are under way on new UN sanctions against Iran. "I am optimistic that we will succeed in taking the next step here," Merkel said. While seeking broad agreement can be time-consuming, "I believe that it increases the effectiveness" of action, she added.