German Chancellor Angela Merkel and Israeli Prime Minister Benjamin Netanyahu gave a joint press conference in Jerusalem on Tuesday following a joint meeting of their respective cabinets.

Merkel used the press conference to reject the idea of imposing any sort of boycott on Israel over its ongoing settlement activities in the occupied Palestinian territories.

"We do not in any way support the boycott ambitions," Merkel said, referring to calls from some human rights groups. "For Germany, that is not an option.

At the same time, though, Merkel criticized Israel for continuing to build homes in the occupied territories, which Palestinians want as part of a future state.

She said the best way forward in finding a peaceful end to the conflict between Israel and the Palestinians was a two-state solution.

Netanyahu was more direct with his comments regarding a boycott: "There's a way to stop the [Middle East] peace process - with a boycott against Israel," he said.

Netanyahu: 'Mistake' to ease sanctions on Iran

When it came to the question of a nuclear-armed Iran, Netanyahu repeated Israel's stance that it believes it was a mistake for Western countries – including Germany – to ease some sanctions against Iran as talks continue to establish limits on the country's uranium enrichment.

Netanyahu said that only a zero-tolerance policy toward Iranian nuclear enrichment would be effective.

Merkel said that Iran should be allowed to enrich uranium to a small degree for energy purposes, but that "assurances" should be in place to prevent Iran from producing an atomic weapon.

She said "if we can achieve that, it will be better than the situation today."

A 'sign of trust' between Germany and Israel

Merkel traveled to Israel with nearly all of her ministers in tow for the joint cabinet meeting - the fifth of its kind since 2008. The two countries signed a series of new agreements, and Merkel highlighted two in particular. The first was Israel's acceptance of Germany's offer to provide consular services to Israeli travelers in countries where the Jewish state does not have a diplomatic presence.

She called this a "sign of the trust" that existed between Germany and Israel.

Netanyahu described the meeting between the joint cabinets as "enjoyable and productive."

Later on Tuesday, Merkel received the Presidential Medal of Distinction from Israel's head of state, Shimon Peres. The award is Israel's highest civilian honor.

Peres said as a young former East German Merkel had in her heart "torn down" the Berlin Wall and now Merkel supported "strongly and without hesitation" the state of Israel and its security interests.

mz/pfd,ipj (Reuters, dpa, AFP)