By Madeline Chambers BERLIN, March 29 (Reuters) - German Chancellor Angela Merkel will try to build on momentum gained at this week's Arab League summit when she travels to the Middle East on Saturday to push Israelis and Palestinians to revive peace efforts. Merkel, holder of the EU's rotating presidency, also wants to assess the new Palestinian government of unity which includes secular Fatah and Islamist Hamas factions, said German officals. Her mission follows a visit by U.S. Secretary of State Condoleezza Rice and comes as Europe edges towards diplomatic engagement with non-Hamas members of the unity government. "Now is a very important time. We have a complex situation with opportunities and risks and the chancellor wants to get a picture of the situation for herself," said a German official, requesting anonymity. In particular, Merkel wants to capitalise on the closer involvement of Arab nations, said officials. Arab leaders holding summit talks this week are relaunching a five-year-old initiative offering Israel normal relations with Arab states in exchange for its withdrawal from land occupied in the 1967 Middle East war. Palestinian President Mahmoud Abbas warned of regional violence if Israel rejected a "hand of peace" extended to it on Thursday and called for an international peace conference. Western nations are waiting to see what policies the Palestinian unity government pursues before deciding on what sort of relationship to have with it and whether to resume aid suspended last year after Hamas won at the polls. QUARTET CONDITIONS A resumption of aid depends on the fulfilment of conditions set by the "Quartet" of Middle East peace negotiators -- the recognition of Israel, renunciation of violence and acceptance of existing peace accords. As EU president, Germany represents the 27-member bloc in the Quartet, which also includes the United States, EU, Russia and United Nations. "She will make clear the government's policies must reflect the Quartet's demands before cooperation can take place," said a second German official. Merkel has made reviving the stalled peace process a priority of her EU presidency but hopes for a breakthrough are low, especially as both Israeli Prime Minister Ehud Olmert and Abbas are perceived as being domestically weak. Even Merkel seems to realise her role is limited. In an unusual move, only a small number of reporters from German media organisations will accompany her. "We can't replace the regional players," said one German official. "Nothing will happen without Olmert and Abbas. We must encourage them and try to bring them together." The chancellor spoke to U.S. President George W. Bush after Rice's visit, which resulted in Olmert and Abbas agreeing to meet every fortnight. Merkel heads to Jordan to meet King Abdullah on Saturday before going to Israel for talks with Olmert, Abbas and other senior politicians. She then visits Lebanon, meeting Prime Minister Fouad Siniora and dropping in on a German frigate which is part of the U.N. peacekeeping mission there.
