Speaking at the beginning of his three-day visit on Sunday, Sigmar Gabriel (pictured above, center), who is also Germany's economy minister, said his country was willing to act as a mediator between Iran and Israel in order to help improve their relationship.

Following last Tuesday's landmark agreement between leading world powers and Iran over its nuclear program, Germany now faces a diplomatic dilemma as it works to win new business with Iran.

Israel, with whom Germany has developed a strong relationship since the end of World War II, strongly opposes the nuclear program agreement.

Israeli-Iran tensions

Speaking on CBS' "Face the Nation" on Sunday," Israeli Prime Minister Benjamin Netanyahu said Tehran had received a "dream deal" and could still obtain a nuclear weapon.

The deal "may block or delay Iran's path to one or two bombs for the next few years, assuming they don't cheat, but it paves their way to many, many bombs after a decade or so," Netanyahu said.

Another delicate subject facing Germany is Iran's reluctance to recognize Israel. Iran doesn't currently accept Israeli passports and voted against the country's admission to membership in the United Nations.

"Questioning [Israel's] right to existence is something that we Germans cannot accept," Gabriel said.

"You can't have a good economic relationship with Germany in the long term if we don't discuss such issues and try to move them along," the vice chancellor told a gathering of German and Iranian businesspeople in Tehran.

Hopes for increased trade

The deal agreed this week will end a 12-year standoff between the US, the European Union and the UN. Sanctions imposed on Iran will be lifted in exchange for long-term curbs on the country's nuclear program, which the West thought was intended to make a nuclear bomb. Tehran has always denied seeking nuclear arms.

Until 2007, Germany was Iran's leading supplier from outside the region - a title it lost in 2007 to China, which now sends 15 to 20 times as many goods there as Germany.

Eric Schweitzer, head of the Association of German Chambers of Commerce and Industry (DIHK), said German-Iranian trade could more than double to a value of 6 billion euros ($6.5 billion) within around two years.

During his three-day visit, Gabriel will also speak to Iran's human rights representatives. The UN claims the country is guilty of human rights violations against women, religious minorities, journalists and activists.

ksb/cmk (dpa, Reuters)