German Chancellor Angela Merkel arrived in Israel Monday to discuss nuclear talks with Iran and to encourage Prime Minister Benjamin Netanyahu to reach a two-state solution with the Palestinians.

"We are going to discuss the Iranian nuclear programme and ways of progressing talks with the Palestinians," Netanyahu said as he met Merkel at his Jerusalem residence, according to Israeli public radio.

"Israel wants to reach a real peace that will put an end to the conflict" and secures recognition from the Palestinians of Israel as the state of the Jewish people, Netanyahu added.

Germany is part of the so-called P5+1 group of world powers -- along with the United States, Britain, France, China and Russia -- which hope to negotiate a comprehensive accord with Tehran in order to allay fears about Iran's nuclear programme.

Netanyahu was an outspoken critic of an interim deal reached with Iran in November under which it agreed to curb or freeze parts of its nuclear programme in exchange for limited relief from crippling international sanctions.

The Israeli prime minister said Monday he hoped "Germany and the other P5+1 countries will insist on the genuine demands to prevent Iran from becoming a nuclear threshold state."

Israel, the region's sole if undeclared nuclear-armed state, has long suspected Iran of pursuing nuclear weapons, charges repeatedly denied by Tehran.

Ahead of her arrival, Merkel stressed she will be supporting efforts by US Secretary of State John Kerry to resolve the decades-old Israeli-Palestinian conflict.

"We need, as soon as possible, a stable two-country solution, with a Jewish state of Israel and at the same time a state for the Palestinians," Merkel said in her weekly Saturday podcast.

Merkel and the 16 ministers accompanying her were due to sign cooperation agreements with Israeli ministers in a broad variety of fields including security, diplomacy, economy, justice, science and culture, Netanyahu's office said.

Merkel dined with Netanyahu on Monday, with her official meetings due to begin the following day.

Germany and Israel have held regular "government consultations" since 2008.

On Tuesday, Merkel is to receive the Presidential Medal of Distinction from Israeli President Shimon Peres at his Jerusalem residence before returning to Berlin.