"I'd note that Germany's deployment of additional resources and personnel to Afghanistan has allowed other NATO allies to increase their support for the mission to protect the Libyan people," Obama said during a joint news conference with Merkel at the White House. "The chancellor and I have been clear [Libyan leader Moammar] Gadhafi must step down and hand power to the Libyan people, and the pressure will only continue to increase until he does."
Germany abstained from the U.N. Security Council vote authorizing force to establish a no-fly zone and protect Libyans from Gadhafi, short of occupations.
"Germany supports the NATO operation simply by being present in the stance there, and also by stepping up our commitment in Afghanistan," Merkel said through a translator. "It is our joint will that this NATO mission is successful. And this is important for the people in Libya, but it's also important for NATO, for the alliance at large."
Noting that Germany is of the United States' strongest allies, Obama said the partnership is evidenced in the largest trade relationships in the world, through joint military functions and through diplomacy.
"There's hardly any global issue where we don't consult one another," Obama said of his partnership with Merkel and noting he believed this was their 10th meeting.
He thanked Merkel for supporting the principles he outlined in May that would be the basis for negotiations between Israelis and Palestinians and commended her for her work to bring the parties back to the negotiating table.
"Just as we agree that both sides will need to make difficult choices, we agree that unilateral actions -- such as Palestinians seeking a vote on statehood at the U.N. General Assembly -- should be avoided," Obama said.
The two leaders agreed that Iran's nuclear program and its refusal to engage in any "meaningful talks" remain a serious concern, Obama said.
"So we agreed that if the International Atomic Energy Agency this week determines again that Iran is continuing to ignore its international obligations," the U.S. president said, "then we will have no choice but to consider additional steps, including potentially additional sanctions, to intensify the pressure on the Iranian regime."
Merkel touched on the economic issues she and Obama discussed, noting both countries are "very much aware" of the tough economic times globally.
"So Europe needs to be competitive and we also need to be competitive if we wish to remain an interesting economic partner for the United States," Merkel said. "This has to be done on the basis of strength, of competitiveness."
At a state dinner and reception in Merkel's honor, hosted by the president and first lady Michelle Obama, the president praised Merkel for resisting communism as a young girl in East Germany, and presented her with the Presidential Medal of Freedom.
"She remembers when the (Berlin) Wall went up and how everyone in her church was crying," the president said. "Told by the communists that she couldn't pursue her love of languages, she excelled as a physicist. Asked to spy for the secret police, she refused. And the night the Wall came down, she crossed over, like so many others, and finally experienced what she calls the "incredible gift of freedom."
He said Merkel was being honored "not for being denied her freedom, or even for attaining her freedom, but for what she achieved when she gained her freedom."
Merkel thanked the American people "first and foremost, for this extraordinary honor, knowing full well how much you have done for us Germans."
"And I thank you personally, Mr. President, because you are a man of strong convictions," she said. "You touch people with your passion and your visions for a good future for these people, also in Germany."