Israeli Prime Minister Benjamin Netanyahu clashed with German Chancellor Angela Merkel yesterday over new Jewish settlements but both were at pains to stress their unshakable ties.

On a visit that had risked being overshadowed by the diplomatic storm that has strained relations with close allies, Netanyahu joined Merkel for a meeting between most of their cabinet ministers after a private dinner late Wednesday.

Merkel told reporters at a joint news conference that Germany, like other Western partners, hoped Israel would drop plans to build more than 3,000 settler homes on a strategic strip of occupied Palestinian land.

“On the question of settlements, we are agreed that we are not agreed,” she said with a wry smile, looking at Netanyahu.

Netanyahu insisted his settlements policy did not mark a radical new departure, and were merely picking up where other Israeli governments had left off. He said the homes would remain even in a two-state solution with the Palestinians.

“The curious thing is that most governments who have looked at these suggestions, these proposals over the years, including the Palestinians themselves as revealed in leaked documents, that these blocs, these arrangements are going to be part of Israel in a final political settlement of peace,” he said.

“I think the root cause of the problem is not the settle-ments. I hope that we can engage at least part of the Palestinian people in a discussion about mutual co-existence, about mutual peace.”

Netanyahu said Israel would continue to seek an accord with the Palestinians.

The Israeli leader arrived from Prague where he had singled out the Czech Republic for its “friendship and courage” as the only European state to have opposed a Palestinian status upgrade at the UN last week. (AFP)