Berlin - German Chancellor Angela Merkel has told Israel she hopes the peace process with the Palestinians will lead to a two-state solution, a government spokesman said on Friday.

Spokesman Thomas Steg said Merkel conveyed this message to Israeli Prime Minister Benjamin Netanyahu during a telephone conversation earlier in the day.

He said Berlin, along with the United States and the European Union, wanted to see a resumption of peace negotiations envisaged under the Annapolis declaration.

Berlin - Germany's upper house of parliament approved controversial legislation Friday that would enable the state to seize control of troubled mortgage lender Hypo Real Estate.

The measure, seen as a last resort to stabilize the German financial market, marks the first time in modern-day Germany that bank shareholders face possible expropriation.

The approval, which follows similar action by the lower house 11 days ago, comes after the government took an 8.7 per cent stake in the shaky lender as a first step to gaining full control.

Berlin - Dignitaries gathered Thursday evening in Berlin for the formal handover of a valuable collection of traditional Japanese art to the German capital's Museum of Asian Art.

Berlin-born collector Klaus F Naumann, who lives in Tokyo, has agreed to donate 100 paintings and ceramic art items dating from the 6th to the 19th centuries to the museum, which has been exhibiting them as loans since 2000.

In addition, he is selling the museum 55 East Asian lacquerware items from his collection.

Berlin - Bundesliga leaders Hertha Berlin hope Andrey Voronin will be in the team to face Borussia Dortmund on Saturday despite the striker being diagnosed with a broken nose.

Hertha general manager Dieter Hoeness said Thursday Voronin broke his nose in Ukraine's 2-1 defeat to England in a World Cup qualifier on Wednesday evening.

Voronin, who is on loan from Liverpool, suffered the injury when he was accidently struck by England captain John Terry's arm.

Berlin - Berlin officials are expecting the United States to expel war-crimes suspect John Demjanjuk, 88, on Monday next week to face possible trial in Germany for assisting in at least 29,000 Nazi death-camp murders.

Ulrich Staudigl, a spokesman for the Justice Ministry in Berlin, said Thursday, "The way things are looking now, I can confirm that Demjanjuk will probably arrive in Munich on Monday."

Berlin - The German parliament on Thursday slapped a 2.2 million euro (2.8 million dollars) fine on the far-right National Democratic Party of Germany (NPD) for accounting irregularities.

The party failed to list correctly its assets and funding it received from the state in its 2007 statement of accounts, an official announcement said.

According to the rules governing Germany's political parties, the fine is double the amount of the erroneous declaration.