Foreign Minister Guido Westerwelle told the German parliament that everything possible had to be done to avoid endangering the Middle East talks, dpa reported.
He noted that a freeze on settlement projects in the occupied Palestinian territories is one step for the continuation of the negotiations.
Meanwhile, the European Union called for an "extension of the moratorium decided by Israel," saying that the settlements are "illegal under international law."
However, Israeli Prime Minister Benjamin Netanyahu on Friday rejected the extension of the project, which expires at the end of this month.
Acting Palestinian Authority Chief Mahmoud Abbas has threatened to leave the talks if Israel resumes its settlement activities in the occupied West Bank and East al-Quds (Jerusalem).
According to the Palestinians, Israel's insistence on the continuation of the settlement projects would be a major obstacle towards the establishment of a viable Palestinian state.
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