BERLIN – Secretary of State Condoleezza Rice said Thursday she heard strong encouragement from Israeli and Palestinian leaders and their neighbors for quick progress toward a Middle East peace agreement.
Before a session in which Rice was to update German leaders on her recent trip to the Middle East, Chancellor Angela Merkel said that Europe and others are eager to help.
"There is no doubt there could be a very important effect on the entire region if we are able to make progress on Middle East peace," Rice said.
"I did find the parties very desirous of making progress," she added. "I believe the whole region is looking for ways to make progress and drive toward the establishment of a Palestinian state."
At the start of her Berlin visit Wednesday, Rice said now is not the time for the United States to talk to adversary Iran and that the Bush administration is not trying to escalate a confrontation over Iraq.
The top U.S. diplomat is in Europe to bring German and British leaders up to date on Mideast peacemaking efforts. She was seeing British Prime Minister Tony Blair and Foreign Secretary Margaret Beckett later Thursday.
Germany holds the rotating presidency of the European Union, making it a party to an international group dedicated to guiding Israel and the Palestinians through a three-year program to set up an independent Palestinian state alongside Israel.
"The impression we have gained of late is that indeed movement is noticeable," Merkel said. "We are ready to make a political contribution and we are very interested in seeing the conflict settled," she said.
On Thursday, Rice said that Iran is apparently not ready to accept a conditional U.S. offer to join European talks over its nuclear program.
"For reasons that perhaps the Iranians understand, they've been unable to take up that offer because they refuse to do what the international community insists that they do," Rice said Wednesday, a reference to a United Nations demand that Iran roll back nuclear activities.
Until the Iranians comply, "this is not the time to break a long-standing American policy of not engaging with the Iranians bilaterally," Rice said during a press conference with German Foreign Minister Frank-Walter Steinmeier.
Allies in Europe and elsewhere, numerous lawmakers and the bipartisan Iraq Study Group have all urged President Bush to engage Iran and Syria in hopes those nations could help curb violence in neighboring Iraq. The administration refuses, saying both nations would demand too high a price.
The United States is building up its troops in the region in what appears to be a message to Iran. Last week, U.S. troops captured six Iranians working at a liaison office in the northern city of Irbil. One of the six was released; the rest were said to be connected to an Iranian Revolutionary Guard faction that funds and arms insurgents in Iraq.
"The United States is not escalating this in Iraq," Rice said. "We are simply responding to the fact that there are Iranian efforts to assist those who are building explosive devices that are dangerous to our forces."
Continuing an intensified push to bring Israelis and Palestinians closer to peace, Rice said both sides will need international help to bridge "difficult moments."
"Undoubtedly they will reach difficult moments, they will reach times when things are not moving forward," Rice said in announcing that U.S., German and other diplomats will convene a Mideast strategy session early next month in Washington.
The meeting of the United States, European Union, Russia and the United Nations will come before a U.S.-backed summit in the Mideast among Rice, Israeli Prime Minister Ehud Olmert and Palestinian Leader Mahmoud Abbas.
Rice came to the German capital after five days in the Mideast spent pushing a renewed Mideast peace process and seeking support for Bush's new Iraq plan.
In Jerusalem and the West Bank, Rice won agreement for a three-way meeting she said would help build confidence after years of fighting. Rice was careful to repeat that that session does not supplant a dormant 2003 peace plan, although it skips past difficult requirements the plan makes of each side.
The group gathering in Washington represents would-be administrators of the plan, which Israelis and Palestinians have endorsed but never put in force. The group has become something of a Greek chorus as the mood between Israel and the Palestinians generally soured over the past three years and as Abbas struggles for internal control against Palestinian Hamas radicals.Click here to go to FOXNews.com's Mideast Center.