There is no an alternative to a two-state peace settlement between Israel and the Palestinians, German Chancellor Angela Merkel said Wednesday.

Merkel, speaking a day before Foreign Minister Avigdor Lieberman visits Berlin, also echoed comments made recently by US Secretary of State Hillary Clinton and White House Chief-of-Staff Rahm Emanuel, saying that progress in the stalled Middle East peace process would make it easier to resolve the long-running standoff over Iran's nuclear program.

Prime Minister Binyamin Netanyahu has yet to formally commit to a two-state solution.

"There is no alternative to such a solution," Merkel said after meeting King Abdullah II of Jordan. "We hope that the new Israeli government will make progress here with the Palestinian forces."

"It is essential that progress in the peace process in the Middle East be made, because this also will improve the chances of an agreement with Iran," she said.

Germany has been among countries leading efforts to defuse concerns - rejected by Teheran - that Iran is seeking a nuclear bomb. Merkel underlined her countries support for "a constructive dialogue with Iran under certain conditions."

She pointed to past international offers of incentives for Iran to give up uranium enrichment and to the new US administration's readiness to engage with Iran.

Regarding the Israeli-Palestinian conflict, Merkel said that "an opportunity arises from the combination of a new attempt with a new American team and the objective necessity, and we want to use it."

Abdullah said that "it is in our vital national interest that a two-state solution is resolved so that we can finally bring peace and stability to the region."