Germany's Merkel: Settlements Prevent Peace

German Chancellor Angela Merkel demanded a halt to Israeli settlement construction on Thursday, saying she is "convinced" such activity will prevent a two-state agreement with the Palestinians, Ynetnews reports.

"I think it is now important to get commitments from all sides and that includes the issue of settlement building," she said in a speech to the Bundestag lower house of parliament.

Merkel also addressed the Iranian nuclear threat, expressing hope that next week's G8 summit will send a strong message to the Islamic Republic while also keeping open the possibility of diplomacy.

"I strongly support President Obama's offer to Iran of direct talks. We will accompany this in a united way. We cannot drop the issue of a nuclear-armed Iran just because of the current situation. That would be completely wrong."

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