Berlin- German Chancellor Angela Merkel said on Friday she was concerned about Israel’s building in settlements in the occupied West Bank, which she said was undermining progress towards a two-state solution for Israel and the Palestinians.

“As before, I see no reasonable alternative to the goal of a two-state solution,” Merkel told reporters before holding talks with Palestinian President Mahmoud Abbas in Berlin.

“Both the Israeli and the Palestinian people have the right to live in peace and security and none of the other options can deliver that credibly,” she said, according to Reuters.

The German chancellor said the building in settlements posed “an impediment to the resolution of the conflict”.

“I am very concerned about developments in the West Bank, which are leading to an erosion of the basis for a two-state solution,” Merkel told reporters.

On Thursday evening, while addressing Germany’s conservative Konrad Adenauer Foundation, Abbas asked rhetorically whether Israel wanted “only one state.”

“On 60 percent of our territory we cannot move freely,” Abbas said. “We can’t even move a stone or plant a tree on these grounds.”

A meeting between the governments of Germany and Israel that was scheduled to take place in May has been cancelled amid rising frustration in Berlin with settlement activity in the West Bank.