At a joint press conference with Davutoglu on Friday, Merkel said governmental consultations between the two countries were happening at a time when there were "huge challenges." Merkel said both Turkey and Germany saw illegal immigration as a big threat and that Turkey had promised "it would do everything to reduce the number of refugees."

She also announced that a working group would discuss the refugee crisis and disbursing 3 billion euros ($3.24 billion) to Turkey in refugee aid.

Merkel also emphasized that initiating a peace process in Syria would be an important step in resolving the refugee crisis. As of now, there were 2.5 million migrants from Syria in Turkey, Merkel told reporters.

Both Turkey and Germany were ready to "intensify cooperation against the Daesh," Merkel said, referring to the terror group "Islamic State" (IS) by its Arabic name. She also spoke about finding a political solution to the terror created by the Kurdish separatists of the PKK.

Largest number of refugees in the world

The Turkish prime minister reaffirmed his country's close ties with Berlin and said Ankara was working "hand in hand" with Berlin in the fight against the IS in Syria and Iraq. Addressing the war in Syria, Davutoglu said a political solution was needed to the conflict. "No one will go back as long as Assad is in power," he told journalists, adding that Russia's presence in the region had worsened the situation.

Speaking to the press before the conference, Davutoglu said nobody could expect his country to help refugees on its own. "We're not begging for money from the EU," he said, adding that 3 billion euros were not enough to overcome the crisis because it is unclear how long it will last.

Germany's leaders have expressed concerns with transferring the money to Turkey, with Deputy Chancellor Sigmar Gabriel alleging that Ankara had not carried out its part of the agreement. Leading leftist politician Bernd Riexinger also warned against "dirty deals" with the Turkish government. "Every euro must be used for the accommodation and maintenance of refugees," he told public broadcaster SWR.

Turkey is a key transit country for immigrants leaving Iraq and Syria and coming to Europe through Greece. Germany and European Union countries signed an agreement with Turkey in November to resolve the refugee crisis and to help Ankara deal with the migrant problem within its territory. Turkey in turn expects discussions facilitating its entry into the EU and a visa waiver for its citizens traveling to Europe.

mg/kms (AFP, AP)