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Foreign Minister Avigdor Lieberman's criticism of the "peace industry" which characterized Israel's policies toward the Palestinians has wrankled his interlocutors in Europe.

Germany's top diplomatic official urged Foreign Minister Avigdor Lieberman Thursday to adopt a two-state plan as the basis for peace in the Middle East and the "sole path to peace and security."

Foreign Minister Frank-Walter Steinmeier set out Berlin's "clear expectation" in a statement to the media just before he was to meet with Lieberman, who is touring European capitals.

The hardline minister had refused to commit to a two-state approach, under which the Palestinian territories would achieve statehood, when he met earlier with members of the German parliamentary foreign affairs committee.

Lieberman talked about a "peace industry," which to date had achieved little but waste money, according to parliamentarians at the meeting. He further described Iran as a major threat.

"All this is far from encouraging," said former German minister of state for foreign affairs, Werner Hoyer.

Later in the day, Lieberman paid his respects at Berlin's Holocaust memorial, laying a wreath at the 19,000-square-meter monument in the center of Berlin containing 2,711 individually shaped concrete blocks, known as "stelae."

Lieberman's European visit - which had included meetings in Rome, Paris and European Union talks in Prague - was mostly conducted out of the media eye. In Berlin, no joint press conference or photo call was convened for his meeting with Steinmeier.

This echoed Lieberman's reception in France, where Foreign Minister Bernard Kouchner chose not to hold a joint press conference as had been customary when Lieberman's predecessor Tzipi Livni came to Paris.

The Israeli foreign minister, who heads a nationalist party in Prime Minister Benjamin Netanyahu's coalition, caused a stir on his first day in office, when he announced that Israel was no longer bound by the so-called Annapolis peace process, which formed the basis of the Israeli-Palestinian peace talks in 2008.