Merkel made the remarks on Tuesday ahead of a visit by Israeli Prime Minister Benjamin Netanyahu to Berlin on Wednesday.
Merkel and Netanyahu are scheduled to hold talks on Wednesday night when the German chancellor is expected to tell the Israeli premier to either consider the establishment of a Palestinian state or risk isolation on the global stage.
On November 29, the 193-member UN General Assembly voted 138-9 with 41 abstentions to upgrade Palestine’s status to non-member observer state.
The observer state status grants Palestinians access to UN agencies and the International Criminal Court, where they can file formal complaints against the Israeli regime.
On Monday, Israel announced that it plans to construct 1,600 new illegal settlement units in East al-Quds (Jerusalem).
On November 30, Israel approved a plan to build 3,000 more units in East al-Quds and the occupied West Bank.
Many countries, including some of Tel Aviv’s allies, have condemned the Israeli plans to construct illegal settler units in the occupied Palestinian territories.
Swedish Foreign Minister Carl Bildt said on Monday that the Israeli plan is “pure vengeance against the Palestinians following the UN vote.”
On Monday, Britain, France, Spain, Sweden, and Denmark summoned the Israeli ambassadors in their capitals to protest against the settlement expansion plan.
In addition, Turkey strongly condemned the move on Sunday, and the Turkish Foreign Ministry issued a statement saying that Israel’s illegal settlement activities intentionally “destroy the groundwork” laid for establishing lasting peace in the region.
On Friday, US Secretary of State Hillary Clinton urged Tel Aviv to cancel the plan, which she called “counterproductive.”
UN Secretary General Ban Ki-moon also expressed “grave concern and disappointment” on Sunday over the Israeli settlement plans.