In a congratulatory message to incoming Israeli Prime Minister Benjamin Netanyahu, German Chancellor Angela Merkel pressed him Wednesday to advance the peace process with the Palestinians and usher in a two-state solution to the conflict, reported dpa.

"I hope you will manage to achieve decisive progress towards a two-state solution," she said, referring to German support for establishing a sovereign Palestinian state which would agree to exist in peace with its neighbour Israel.

Thomas Steg, Merkel's deputy spokesman, added that Germany saw "no alternative" to this.

Germany, which has paid large sums to the Jewish state in reparations for the Holocaust, has been a diplomatic supporter of Israel for decades and does not usually criticize Israeli policies.

Netanyahu said Tuesday during his swearing in that he was committed to peace, but he did not voice any support for the two-state solution.