"We focused mostly on the situation here on the ground, the disengagement from Gaza and what will follow next, how we can join our forces to have a positive development, and how we can move forward with the road map," Fischer said on Thursday.
The two ministers also discussed "the aid that Germany will contribute in the framework of the EU, in the framework of the G8, and bilaterally, to improve the situation here for the development of the economy and building the institutions in a successful way", he added.
Al-Kidwa said they also discussed Jewish settlement activity and Israel's ongoing construction of its controversial West Bank separation barrier.
"We expressed our appreciation for the assistance being provided by Germany ... and in the context of the EU, and expressed the hope that Germany will be there, as usual, when it comes to the package that was promised by Mr Wolfensohn to the G8," Al-Kidwa said.
James Wolfensohn, the Middle East quartet's "disengagement" envoy, held talks in Ram Allah earlier this week on disbursing $3 billion of aid pledged to the Palestinian Authority by the G8 industrialised nations last week.
Germany has budgeted for 48 million euros ($58 million) in direct aid to the Palestinians in 2005.
Berlin also contributes to UN development funding and provides some 20% of EU funding to the Palestinians.