During a deeply emotional and historic visit to Israel to mark the Jewish state’s upcoming 60th anniversary, German Chancellor Angela Merkel focused on two pressing issues: Israeli-Palestinian peace and Iran’s nuclear weapons program.

Merkel outlined plans for an Israeli-Palestinian peace conference to be held in Berlin in June, and the Israelis asked that Germany, one of Iran’s biggest trading partners, do more about stopping Iran’s fundamentalist regime from acquiring nuclear weapons.

Although still very much in the shadow of the Nazi past, relations between Israel and Germany have never been stronger. More than any German chancellor, Merkel seems to have genuinely warm feelings toward Israel. Israeli Prime Minister Ehud Olmert describes her as a “close confidante,” and Merkel says she believes the existential threats facing Israel also threaten Germany.

At the Yad Vashem Holocaust memorial March 17, a visibly moved Merkel declared that Germany accepted responsibility for its Nazi past and was determined to work together with Israel for a common future.

Indeed, Israeli leaders say they are convinced Germany can play a crucial role in helping Israel establish its future security.

For one, Germany seems set to play a more active role in the Israeli-Palestinian peace process. Merkel and Tony Blair — the special Middle East envoy for the European Union, Russia, the United Nations and the United States — are jointly organizing the proposed Berlin peace conference. The parley will focus on steps to prepare the Palestinians to run their own state.

Instead of first cutting a peace deal and then attending to the details on the ground, Blair argues that the Palestinian state first should be built. Only then may the deal be struck, when both sides see it is as more than just a pipe dream.

That also seems to be the new approach by Germany, which sees a vacuum in U.S. peacemaking efforts and is moving to keep the two-state solution alive. The Germans long have advocated for a greater European role in Middle East peacemaking while recognizing the ultimate necessity of American leadership.

Since unification in 1990, Germany has shown a readiness for greater involvement in Middle East affairs. In the mid-1990s, Germany mediated a prisoner exchange deal between Israel and Hezbollah. Former German Foreign Minister Joschka Fischer played a leading role in drafting the 2003 road map peace plan.

And in 2006, after the Second Lebanon War, Germany made the unprecedented move of sending its troops to the Middle East to help keep the peace. As part of the expanded United Nations peacekeeping force that was established under the U.N. resolution that brought the 34-day war to an end, Germany is providing a naval task force that patrols the Lebanese coast to prevent arms smuggling.

The Germans also have taken the initiative in trying to pry Syria from the Iranian axis. Despite strong U.S. opposition, German Foreign Minister Frank-Walter Steinmeier has been talking to Damascus, but so far without result. Olmert, in an intriguing change of strategy, has given him the go-ahead to pursue this method.

The Germans also have been able to balance their close support for Israel with generous aid to the Palestinians. Among E.U. countries, Germany has been the Palestinians’ largest and most consistent donor. Since 1993, it has given more than $700 million directly, as well as 23 percent of all E.U. contributions.

Merkel believes this “even-handedness” gives Germany a unique advantage in peacemaking and in the delicate role of negotiating prisoner exchanges with groups such as Hezbollah.

“It is impossible to overstate the significance of the degree to which Germany is trusted in the region,” she once declared in a speech to the Bundestag, Germany’s parliament.

For the Israelis, though, even more important than any facilitating role Germany might play is its potential leverage on Iran.

Olmert is convinced that Germany can do more than most other countries to stop Iran from developing nuclear weapons because Germany remains one of Iran’s largest trading partners and Iran seeks out German technology for its nuclear projects.

Germany’s Siemens company designed the as-yet-unfinished Russian-built Bushehr nuclear plant in 1974, and German-made parts remain more compatible than others.

Indeed, until work at the plant was halted in 2005, German parts were smuggled to Bushehr via a nuclear

reactor in the Russian city Rostov. Construction at Bushehr recently resumed.

While trade between Germany and Iran is down 26 percent since 2005, to $4.7 billion in 2007, and major German banks have stopped dealing with Iran, about 1,700 German companies still do business with Tehran. Despite a tightening of export controls, nuclear-related items apparently still are getting through.

Perhaps the most significant German contribution toward suppressing the Iranian nuclear threat has been the state-of-the-art Dolphin submarines Germany has provided to Israel. Three are in service, and two more are due in 2010.

According to foreign sources, the submarines could carry nuclear warheads and provide Israel a fail-safe, second-strike capability against any Iranian nuclear attack.

The closeness and special nature of Israeli-German ties was underlined by the chancellor’s entourage: eight Cabinet ministers who met one-on-one with their Israeli counterparts and then took part in an unprecedented government-to-government meeting in the Israeli Cabinet room.

The two sides signed a string of agreements upgrading economic, defense, scientific and cultural ties. With trade of more than $5 billion a year, Germany is Israel’s second-largest trading partner after the United States.

Merkel also was given the honor of addressing Israel’s parliament, the Knesset. In an emotional speech delivered in German, Merkel said her country is “filled with shame” over the Holocaust and that she bows before the victims of the Nazi genocide.

For some, especially Holocaust survivors, the idea of German being spoken in the Knesset was anathema. Several of the 120 parliamentarians skipped the ceremony.

For others, the strong support for Israel from such a powerful European country, Nazi history notwithstanding, is seen as one of the major diplomatic achievements of Israel’s 60 years of statehood.

The Associated Press contributed to this story.