There has been no meeting of minds on the Israeli settlement issue as Benjamin Netanyahu’s met Angela Merkel in Berlin.
The Israeli Prime Minister and the German Chancellor confirmed they remained divided over Israeli plans to build more Jewish homes.
Germany abstained in the recent UN vote upgrading the Palestinians’ diplomatic status.
Since then there has been international condemnation of moves to develop a particularly sensitive area of the occupied West Bank.
“We have agreed to disagree: But this does not alter the fact that of course we share the same views concerning the big questions, like those I mentioned with regard to security. On this one point, however, our opinions differ. Israel will decide, Israel is a sovereign country,” Merkel said at a joint news conference.
Netanyahu is in Europe trying to persuade leaders to look beyond settlements.
“Most Europeans believe that the root cause of our conflict with the Palestinians is the settlements,” he replied. “The settlements issue is one that has to be resolved in negotiations, but it is not the root cause of our conflict because this conflict was waged from the areas adjacent to Israel for 50 years before there was a single settlement.”
The Palestinian President Mahmoud Abbas has described the proposed E1 housing project as an uncrossable “red line”.
Opponents say it might seriously compromise a future state of Palestine by cutting it in half.
Israel has set the early planning process in motion, although it would be some time before any building starts.
Most countries consider such settlements illegal.