Coming out of a meeting with Prime Minister Benjamin Netanyahu on Thursday, German Chancellor Angela Merkel said she and Netanyahu had “agreed to disagree” on the issue of West Bank settlements.

“We in Germany believe the work on a two-state solution must be continued… we must keep trying to come to negotiations and one-sided moves should be avoided,” she added.

Netanyahu, for his part, said “Israel will keep the planned settlement corridor under any future peace deal.”

“Most governments who have looked at these proposals over the years, including the Palestinians themselves… understand that these blocs… are going to be part of Israel in a final political settlement of peace,” the prime minister said, referring to construction in several East Jerusalem neighborhoods recently announced by the government.

The announcements have been widely condemned, even by some of Jerusalem’s closest allies, with the harshest condemnations reserved for plans to unfreeze building plans in the E1 tract between Jerusalem and the Ma’aleh Adumim settlement, east of the capital.

Netanyahu acknowledged that there remain “one or two” differences between his and Merkel’s stands, but Thursday’s meeting put those differences, as well as the common ground between the two, into “a genuine perspective.”

Palestinian officials said Wednesday they would leverage their new upgraded UN status to seek a Security Council resolution to halt Israel’s plans to expand settlements.

“The settlement plans that Israel announced, especially E1, are a red line,” Palestinian Authority President Mahmoud Abbas told reporters. “This must not happen.”

On Wednesday, Netanyahu had criticized Germany’s abstention from voting on the Palestinian status upgrade resolution at the United Nations last week, but on Thursday he expressed appreciation for Germany’s commitment to Israeli security.

“I have no doubt whatsoever about the depth of your commitment to Israel’s security and to the well-being of the Jewish state,” the prime minister told Merkel at the press conference.

Netanyahu said Merkel’s decision not to vote against the Palestinian move last week would set back the peace process. “It would be dishonest if I were to conceal that I was disappointed over how the Germans voted at the United Nations, just as many Israelis were,” Netanyahu told German newspaper Die Welt en route to Berlin.

“I think Chancellor Merkel thought that this vote would somehow promote peace. In reality the opposite happened: After the UN vote, the Palestinian Authority under President Mahmoud Abbas made efforts to unite with the Hamas terrorists. The resolution did not call for a recognition of the Jewish state or to end the conflict with us or to give security guarantees. Rather, it emboldened the Palestinians to harden their positions and not to enter negotiations.”

Netanyahu also rejected international admonishment of Israel for its plans to expand settlements, calling critics “oversensitive.”

“What’s our big crime? We are building in the areas that will remain in Israel after a peace agreement,” he said. “This is the land where Jews have been living for almost 4,000 years. We’re talking about suburbs that belong to the Jerusalem municipality. No map is being changed and nothing is being prejudged. People are oversensitive.”

“Israel remains fully committed to achieving a peace with the Palestinians,” Netanyahu said. He emphasized that Israel envisions a peace “based on the principle of two states for two peoples, and in this peace, a demilitarized Palestinian state recognizes the Jewish state of Israel.”

Netanyahu called for direct negotiations between Israel and the Palestinians, and added that he hopes “the Palestinians will return to the negotiating table, that they do so without preconditions” so that a peace can be achieved that addresses both Israeli and Palestinian needs.

Earlier, during a visit to Prague, Netanyahu thanked the Czech Republic for voting against the United Nations resolution. The Czech Republic was one of only nine countries to vote on November 29 against the resolution at the UN General Assembly.