Germany will not block NATO in Iraq

He called instead for the United States and Europe to pool their resources to rescue the Middle East from what he called a crisis of modernisation that was fostering terrorism and instability.

"To win the war, we have to win the peace together," he said. "Otherwise we will lose together."

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Fischer's speech at an international security conference in Munich, southern Germany, was closely watched because he led the charge here last year against the US-led war in Iraq, and it was clear that some rifts still persisted.

"Events have proven the position we took at the time to be right," he said as the United States, represented here by US Defence Secretary Donald Rumsfeld, seeks help to transfer sovereignty to the Iraqis and bring stability.

But he called for the unrest to be brought to an end as quickly as possible because failure would have truly damaging consequences for everyone, and said only United Nations involvement could bring legitimacy to that process.

"We have to look forward, and the coalition effort must be successful. The forces of violence and terror in Iraq must not win the upper hand," he said.

"It is vital to restore the sovereignty of the country with broad legitimacy and to transfer it to an Iraqi government, preferably one legitimised at the ballot box."

With the United States pressing NATO to play a larger role in Iraq to help ease the burden on the mainly US forces there, Fischer said Germany would not take part but nor would it seek to block the Alliance.

"The federal republic will not stand in the way of a consensus even if it will not supply German troops to Iraq," he said.

"But the risk of failure and the possible consequences to the NATO alliance in Iraq absolutely must be taken into consideration," he cautioned. "Honesty demands of me that I cannot conceal my deep skepticism on this account."