"There should be no false modesty," Merkel said.

"We must make it clear to our American partners that the approach to energy must be sustainable."

Merkel, who has fought hard to improve German-US relations since taking office one year ago, set her sights on US President George W. Bush and others in his administration who have questioned a link between carbon emissions and global warming.

"The scientific evidence is growing ever stronger" that the planet will face catastrophic consequences due to global warming, she said. "The EU cannot solve the world's environmental problems on its own but it should be a leader," Merkel said.

She said energy efficiency and the use of renewable energy were also crucial elements of security policy considering the concentration of oil and gas supplies in volatile regions of the world.

Merkel said she would work under the German EU presidency to improve ties with producer, transit and consumer countries on energy issues, and to create better conditions for the expansion and maintenance of energy infrastructure.

With an eye to Russia, she said it must be a goal of the bloc to fight the use of energy supplies as a means to exercise political pressure on other countries.

"This is another area in which Europe must speak with one voice and thus strengthen its voice," she said.

After the European Commission's report on Turkey Wednesday, Merkel warned that Ankara must meet its obligations, particularly its promise to lift trade restrictions against EU member Cyprus.

"I strongly support the efforts by the Finnish EU presidency to mediate to solve this problem in the final weeks of its presidency," she said.

"But I say just as clearly -- the (Commission) progress report is clear. Turkey must meet its obligations by the end of the year. Otherwise the EU will draw appropriate conclusions. There cannot and will not be a simple 'steady on'."

Returning to transatlantic ties, Merkel said she would work toward improving sometimes fraught trade relations with Washington.

"This is less about removing tariffs and more about moving closer together on various regulations, for example on product standards and regulation of capital markets," she said, adding that the two sides could do more together to enforce copyright protection on international markets.

Merkel also called for a stronger EU security and defense policy, but insisted that it should never be seen "in opposition to the transatlantic alliance", NATO.

She said the situation in Kosovo would impose new demands on the EU, adding that because NATO troops were still needed in the region, both sides must coordinate their efforts smoothly.

Kosovo has been administered by the United Nations since mid-1999, after a 78-day NATO bombing campaign drove out Serbian forces over a brutal crackdown against ethnic Albanian civilians.

The province remains tense more than seven years later, with ethnic Albanian frustrations over the long process occasionally flaring into violence.

NATO, which still has about 17,000 troops in Kosovo, was sharply criticized for failing to stop anti-Serb riots there in March 2004.

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