"We welcome the formation of a national unity government, under the condition that certain measures are fulfilled," Merkel said.

 

"That would mean that Israel's right to exist would be recognised, that violence would end and that international negotiations, as they already exist, be accepted," she said, outlining a position in common with the EU.

 

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"The land of Israel belongs to both Jews and Palestinians - as long as there are people who reject this fact, the conflict will never be solved"

Iskander, Boston, US

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Germany currently holds the rotating EU presidency.

 

No compromise

 

Merkel said she and Abbas had extensive discussions but she showed no room for manoeuvre on the international demands.

 

Israel has said it won't deal with Abbas on a long-term peace deal if he goes ahead with a coalition with Hamas, limiting immediate prospects for progress toward a solution.

 

Hamas has consistently refused to recognise the Jewish state, which has stymied the ambitions of the Quartet and Israel towards a peace settlement acceptable to them.

 

Abbas, on a European tour to build support for an eventual lifting of an international aid embargo, said Palestinians were suffering under the sanctions.

 

"For eight or nine months our people have been suffering under this boycott," Abbas said.

The Palestinian prime minister, Ismail Haniyeh has begun to form a unity government after Hamas and Fatah agreed a deal brokered at talks in Mecca by Saudi king Abdullah bin Abdul Aziz al Saud.

The agreement ended factional fighting between Fatah and Hamas which claimed at least 100 lives in December and January.