On the morning before European Union leaders meet for a two-day summit in Brussels to discuss the bloc's enlargement process, Merkel told members of Germany's lower house of parliament that it would be an "historical failure" if an agreement on the ailing EU constitution was not struck before European elections in 2009.

"I would consider it an historical failure if we do not succeed in working out the substance of the constitutional treaty by the time the next European elections take place," Merkel said in her speech, which was meant to set out the aims of Germany's EU presidency which starts in January.

The chancellor added that she and the German government would work "intensively" during the six-month presidency "so that such a treaty, based on our common values, can go into force."

Merkel acknowledged that the issue of the constitution would not be settled by the end of Germany's turn at the EU helm but said she hoped that with its support the treaty would be revived and put back on track.

"We have the task at the end of our presidency to set a roadmap" for the future implementation of the constitution, she said.

The constitution was designed to provide the institutional framework for an EU which will grow to 27 member states when Bulgaria and Romania join on Jan.1. But it suffered a severe blow when French and Dutch voters rejected it last year.

Merkel: United we stand, divided we fall

Merkel also urged EU states to work closer together, saying that a united Europe could achieve success, but a divided Europe would weaken the strength of the bloc.

On the thorny issue of Turkey's bid for EU membership, which is expected to be tackled yet again during the summit in Brussels, Merkel said that the EU had decided on a "resolute but prudent" course of action in its standoff with Turkey over Cyprus.

"The EU has reacted (to Turkey), in my opinion, in a way that is both resolute and prudent…prudent in that it is always made clear to Turkey that is worth it to continue working on reforms," Merkel said.

EU leaders were expected during the summit to endorse a decision made by their foreign ministers earlier this week which partially froze Turkey's membership talks due to its refusal to implement a 2005 deal to open its ports to Cyprus.

"This is not a small matter," Merkel said. "Candidates for membership and EU member states must recognize each other politically and diplomatically."

EU to put brakes on further expansion

Although this week's EU summit will confirm that the doors remain open to Turkey and western Balkan states if they are willing to match the bloc's criteria, leaders are expected to confirm a slowdown in plans for further expansion following the entry of Romania and Bulgaria.

In keeping with that expected tone, Merkel said that countries such as Albania, Bosnia, Serbia and Macedonia have a "prospect of membership...but we know that the perspective is a medium-term one."

Merkel also mapped out a number of issues that Germany would tackle as EU president. The chancellor said that Germany would make energy security, research and development, education and cutting back red tape priorities.

Merkel also spoke of the EU's role on the global stage. She said that the EU needed to speak in unison "with a strong voice" when dealing with international crises, citing Iran and the situation in the Middle East.

Middle East peace a priority for Europe

"We face enormous problems in the Middle East," Merkel said, adding that Germany hoped to breathe new life into the Mid-East Quartet of the EU, the US, the UN and Russia, which has been seeking to mediate in the conflict between Israel and the Palestinians, and Hezbollah in Lebanon.

Merkel defended the decision to send Foreign Minister Frank-Walter Steinmeier to Syria by saying "unusual steps" were part of the search for peace in the Middle East. She added that Germany balanced a "readiness for dialogue" in principle with countries such as Syria and Iran with "clear principles and values."

While criticizing Syria, Germany has sought to draw it into talks designed to solve the region's problems. Steinmeier visited Damascus last week and pressed Syria to use its influence to moderate the demands of the Hezbollah militant group, which fought a war with Israel in the summer and is seeking the resignation of Lebanon's western-backed government.