In her first visit to the region as president of the European Union, German Chancellor Angela Merkel reiterated Sunday the international Quartet’s demands from the Palestinians that the latter’s new unity government should recognize Israel’s right to exist, renounce violence and accept past signed agreements before it wins international recognition.

In her meeting with President Mahmoud Abbas in Ramallah, Merkel said that the new government should meet the international demands to help international players reconsider year-long boycott of the Palestinian Authority.

Merkel also asked President Abbas to ensure the release of Israeli soldier Gil’ad Shalit, who has been held by Palestinian resistance groups since last June. The German chancellor did not meet with particular Palestinian ministers, including those of Hamas and Fatah. “We are dealing with Palestinian ministers who accept the Quartet’s criterions”, Merkel maintained.

The top German official welcomed the February Mecca deal between rival Palestinian factions Hamas and Fatah, hoping this would put an end to internal Palestinian violence. She also revealed that the EU will hold financial discussions by the end of April, as German businessmen will likely invest in the Palestinian territories in partnership with Palestinian counterparts.

President Abbas, from his part, called on Israel to halt any unilateral actions- including the expansion of settlements, attacks on Palestinian areas and construction of the ‘notorious’ and illegal separation barrier in the West Bank.

Abbas also called for the release of withheld revenues, estimated at US$ 800, which Israel denies the Palestinian Authority. These funds have been withheld since last January’s legislative Palestinian elections that brought Hamas to power.

Abbas also considered the Arab peace initiative -which was recently re-endorsed by Arab countries in their summit meeting in Riyadah- an opportunity for a two-state solution between Palestine and Israel. The European Union has welcomed the initiative, while Israel rejected it and called for 'amendments'.

Merkel earlier visited Israel and met with Israeli officials including prime minister Ehud Olmert and foreign minister Tzipi Livni.

The Arab peace initiative calls for full Israeli withdrawal from the occupied Arab lands that Israel took over in 1967, in return for normal relations and peaceful coexistence between Israel and 23 Arab states.

Merkel’s visit comes as the region has recently witnessed active international diplomacy, including visits by U.S Secretary of State Condoleezza Rice and United Nations Secretary General Ban Ki-Moon, in a bid to revive Israeli-Palestinian peace talks.