BERLIN - Germany's leader says Israel must halt the construction of settlements, which she says threatens hopes for a two-state agreement with the Palestinians.
Chancellor Angela Merkel told lawmakers Thursday that concessions from all sides are needed - including on Jewish settlements.
Merkel said: "I am convinced that there must be a stop to this, otherwise we will not arrive at a two-state solution that we need urgently."
The U.S. also wants settlement construction in the West Bank to stop completely to help revive Israeli-Palestinian peace talks.
Merkel was addressing the German parliament ahead of next week's Group of Eight summit in Italy.