Palestinian Authority Chairman Mahmoud Abbas told German Chancellor Angela Merkel on Sunday the time had come to end a year-old economic embargo of the Palestinian government.

"There is no justification to maintain it [the embargo] at all ... Otherwise it will be understood that this is a deliberate siege against the Palestinian people," Abbas said after meeting Merkel in the West Bank city of Ramallah.

Merkel, holder of the European Union's rotating presidency, is trying to build on momentum for renewed peace talks between Abbas and Prime Minister Ehud Olmert after Arab states revived their peace offer to Israel.

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During her visit, Merkel did not meet any ministers from the Palestinian unity government. The government, led by Hamas Islamists, includes members of Abbas's Fatah faction and independents.

Earlier, at the news conference with Merkel, Olmert publicly
invited Saudi King Abdullah and other Arab leaders to meet him following an Arab summit's revival of the land-for-peace plan.

Olmert praised Germany during an official welcoming ceremony for Merkel in Jerusalem on Sunday, saying "Germany is Israel's strategic partner for the challenges the lie ahead in the near future."

"Israel is at a critical juncture of important decisions regarding its future and existence," said Olmert.

The prime minister thanked his German counterpart for agreeing to meet with the families of abducted Israel Defense Forces soldiers, saying her countries' assistance on the matter of securing their release is of the utmost importance.

In her first trip to Israel and the Palestinian Authority as EU president, Merkel offered Europe's help in promoting peace between Israel and the Palestinians, saying "I would like to support the sides to walk the path toward peace.

"The Europeans must not assume that they could force a solution. We can't and I don't want to do it," she said during a speech at Hebrew University in Jerusalem, where the former physics researcher received an honorary doctorate.

On Sunday, after a breakfast with Foreign Minister Tzipi Livni, Merkel spent about half an hour at the Yad Vashem Holocaust memorial, visiting the Hall of Remembrance and laying a wreath decorated with ribbons bearing the German flag.

Merkel did not comment to reporters. But before leaving, she wrote in the memorial's guest book: "Humanity grows out of responsibility for the past."

She met with Abbas at his West Bank headquarters in Ramallah on Sunday afternoon, followed by more talks with Olmert in Jerusalem. In Ramallah, Merkel was expected to meet only with Abbas and to avoid Palestinian cabinet ministers, even those who are not Hamas members, her aides said.

Speaking at Hebrew University, Merkel also called on Iran to immediately release 15 British sailors and marines seized in the Gulf on March 23. "Britain has the full solidarity of the European Union," Merkel said. "We demand the immediate release of the 15 British soldiers."

University President Menachem Magidor praised Merkel for her leadership. He said that as chancellor of Germany and current EU president, she has demonstrated a mix of vision and practicality.

"We admire your steadfast friendship with the Jewish people," said Magidor. As Merkel stood on a red carpet, a large blue ribbon was placed on her shoulders.

Merkel arrived on Saturday, holding unofficial talks with Olmert after a stop in Jordan, where she met King Abdullah, one of the strongest supporters of the Arab peace initiative.

EU to deal with non-Hamas Palestinian ministers
The EU foreign ministers decided Saturday, in a meeting in Germany, to start dealing with non-Hamas members of the Palestinian government. In continuing to shun the entire Palestinian cabinet during this trip, Merkel was seen as trying to avoid angering her Israeli hosts.

Abbas was to ask Merkel to deal with all members of his government and to pressure Israel to resume peace talks, said his information minister, Mustafa Barghouti.

Her visit came after last week's renewed land-for-recognition offer to Israel by much of the Arab world. Since then, the Quartet of Mideast mediators, the United States, the European Union, the United Nations and Russia, has said it hopes to arrange a meeting with moderate Arab states, Israel and the Palestinians before the summer.

Merkel holds the rotating EU presidency. However, several obstacles are blocking progress. Much of the world is still reluctant to deal with the new Palestinian unity government, a coalition of the Islamic militant Hamas and Abbas' Fatah movement, because it has failed to explicitly recognize Israel or renounce violence.

Olmert has said he will not talk to Abbas about any of the ingredients of a final peace deal, such as the borders of a future Palestinian state, until Palestinian militants halt rocket fire from Gaza and release an Israeli soldier held in Gaza for nine months.

Olmert, while praising the Arabs' readiness to offer recognition, has been cool to the price Israel is asked to pay for it, a withdrawal from the lands it captured in the 1967 war, including the West Bank, Gaza and east Jerusalem, and recognition of the right of return of Palestinian refugees. Israel has said that while willing to give up lands, it won't return to the 1967 borders.

Olmert flatly rejects the return of refugees. In a visit last week, U.S. Secretary of State Condoleezza Rice wrested a promise from Olmert and Abbas to meet biweekly. Merkel is expected to ask the two leaders to make good use of these conversations - no date has been set for the first round - but her aides said she is not carrying a concrete action plan.

Hamas reiterates hard line
On Saturday, Merkel urged the new Palestinian unity government to embrace Western demands it recognize Israel and renounce violence to revive Middle East peace talks.

"We call on the members of the unity government to adhere to the Quartet principles ... to bring forward the peace process," Merkel told reporters at a news conference with King Abdullah at the start of the Middle East tour.

"We want to support those forces that abide by the Quartet principles," she said.

But Hamas insisted it would not recognize Israel or renounce violence. "We stress that we do not and will never recognise the right of Israel to exist on one inch of Palestinian land," Hamas spokesman Fawzi Barhoum said.

"We will not abandon the resistance to the Zionist occupation until the liberation of all Palestinian soil," Barhoum said.

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