Along with other European nations, Germany is attempting to de-escalate the raging Middle East conflict amid fears the crisis could explode into a regional war.
German weekly news magazine Spiegel reported on Sunday that the United States had asked Merkel to speak to Israeli officials and she told them that Lebanon was in a fragile state and should not be destabilized.
Germany has acted as a mediator between Israel and Lebanon-based guerilla group Hezbollah in the past.
The German government however has not confirmed the magazine report.
Israeli forces have been pounding Hezbollah strongholds in Lebanon since the militant organization captured two Israeli soldiers and killed eight on Wednesday. Around 100 Lebanese, all but a handful of them civilians, have been killed in the air and ground strikes, which Israel has said could continue for weeks or months, until Hezbollah's ability to fire rockets into Israel is destroyed.
The escalating conflict has sparked fears of full-out war.
Merkel speaks with Jordan's King Abdullah
The German government said Merkel spoke with Jordan's King Abdullah on Sunday afternoon from St Petersburg where she is attending a Group of Eight summit.
"The German chancellor and the foreign minister, along with their counterparts from other EU countries, are having numerous conversations, including with representatives of Israel and the Arab countries," a statement said.
"The conversations are aimed at contributing to a de-escalation of the situation and stabilizing the Lebanese government," it said.
European leaders could mediate
The Middle East crisis is dominating the G8 summit and several leaders have expressed concern at the escalating violence.
Italian state television reported on Sunday that Prime Minister Romano Prodi was mediating in the conflict. It said that Israeli Prime Minister Ehud Olmert had conveyed to the Lebanese government via Prodi the conditions for an end to the Israeli offensive. They include the release of the two kidnapped Israeli soldiers and the withdrawal of Hezbollah from southern Lebanon.
Iran and Syria must demonstrate that they are trying to ease the escalating crisis in the Middle East, British Prime Minister Tony Blair's spokesman said at the summit on Sunday.
"People know the links between Iran and Syria and the extremists in this situation," the spokesman said, referring to the militant Lebanese Shiite movement Hezbollah.
"Therefore, all countries in the region have to play their part
in calming the situation down," he said. "It is up to Iran and Syria to show that that is what they are doing."
German Foreign Minister Steinmeier, who has said he understand Israel's need for self-defense but has criticized the country's strikes against Lebanese infrastructure targets as not a "necessary reaction," said in a statement that he had spoken by telephone with Lebanese Prime Minister Fouad Siniora on Saturday.
He said the two had agreed that all efforts must be directed towards an easing of the situation. Steinmeier also underlined the importance of the mediating efforts of EU foreign policy chief Javier Solana, who was expected to begin negotiating with the warring sides on Saturday.
Steinmeier also said he had been in intensive talks in recent days with officials in the region, including the foreign ministers of Israel, Egypt and Syria.
Critics question German mediation
But some doubt Germany's ability to mediate in the current Mideast conflict.
Germany enjoys a good reputation in the region and would do everything to contribute towards de-escalation, said Eckart von Klaeden, foreign policy expert of the conservative Christian Democratic Party (CDU). "But this time mediation will be difficult because both the Palestinian and Lebanese camps lack partners who are ready and able to exercise considerable influence on the terrorists," he warned.
Von Klaeden added that cause and effect should not be confused. "That means, Israel was attacked and has the right to defend itself," he told German newspaper Passauer Neuen Presse.
Elmar Brok, head of the European Parliament's Foreign Affairs Committee called for a joint mediation trip to the region by the foreign ministers of the United States and Russia along with Solana and a high-ranking UN representative.
"The Americans aren't trusted by the Palestinians, the Russians don't have credibility with the Israelis and the Europeans are trusted only to an extent," Brok told German paper B.Z. "But all of them together could stand for a security guarantee and could thus manage to broker a solution successfully."
Minister slams Israeli strikes
As the violence continues to simmer on the Israel-Lebanon border, criticism is mounting in Germany about Israel's response.
German Development Minister Heidemarie Wieczorek-Zeul said Sunday that Israel's attacks on civilian targets in Lebanon were "completely unacceptable."
"The fact that civilian targets and civilians in another state are being bombarded is against international law and completely unacceptable," the minister was quoted as saying in Sunday's edition of Der Tagesspiegel newspaper.
Wieczorek-Zeul said Israel should "do everything possible to protect the civilian population," and also criticised its raids on the Gaza Strip, aimed at retrieving an abducted soldier and halting rocket attacks.
She said the situation in Gaza was "particularly bad for the Palestinian population, who are in a dire humanitarian situation." But she also called on the Palestinian government and the militant Shiite movement Hezbollah "to do everything possible to ensure the captured Israeli soldiers are freed and to stop firing rockets at Israel."
Wieczorek-Zeul criticized the United States for blocking a proposed United Nations Security Council resolution calling on Israel to end its offensive against Lebanon.
"How can we call on the Security Council to resolve other problems in a credible manner when they stop the body from acting when the Middle East conflict threatens to explode?" she asked.
Germans leave Lebanon
Meanwhile, about 100 Germans living in Lebanon have left the country for Syria, the German foreign ministry said on Saturday.
The ministry said the Germans started heading for the Syrian border in convoys on Friday.
"We are trying to organize further help with transport. The embassy in Beirut is assisting all Germans who approach us," a spokeswoman said.
There are about 1,100 Germans living in Lebanon, according to the ministry. About half of them hold dual nationality.
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