Fischer wanted to meet Justice Minister Tommy Lapid at a west Jerusalem hotel Monday, but Lapid demanded the talks occur at the ministry building in east Jerusalem.
Most governments regard east Jerusalem as disputed territory and do not allow senior envoys to meet Israeli officials there. The city's eastern sector, home to about 200,000 Palestinians, was captured by Israel in the 1967 Mideast war and annexed shortly afterward, but the Palestinians claim it as their future capital.
"You have to accept that there are status problems," Fischer said after meeting Israeli President Moshe Katsav. "As a foreign minister — not as Joschka Fischer — but as a foreign minister, I'm obliged to act according to our position of the EU and Germany and many other international partners of Israel."
Lapid said he had nothing against Fischer or against Germany but he could not allow the visitor to set the venue for a meeting.
"He's not going to dictate to me where my office is, nor dictate to us where Israel's sovereignty lies," he told Israeli Army Radio on Tuesday.
Fischer met his Israeli counterpart, Sylvan Shalom, and Prime Minister Ariel Sharon (news - web sites) on Monday and was to meet Palestinian leader Yasser Arafat (news - web sites) and Prime Minister-designate Mahmoud Abbas on Wednesday.
The U.S.-backed "road map" to Palestinian statehood by 2005 is expected to dominate the talks, along with the governmental reform the international community expects of Abbas, widely known as Abu Mazen.
"I'm really interested to see Abu Mazen," Fischer said. "I think that it's very important that he's moving forward and nominating his new Cabinet and then that he can go to work."
The United States, the European Union (news - web sites), the United Nations (news - web sites) and Russia — which make up the "Quartet" of Mideast mediators — have given Israel and the Palestinians several drafts of the plan, the last dated Dec. 20, 2002.
They say they will formally present the plan, thereby setting it in action, after the Palestinian parliament confirms the Abbas Cabinet, probably this month.
Both Israel and the United States have declared Arafat persona non grata, calling for an alternative Palestinian leadership. However, European leaders have continued meeting him.
Swedish Prime Minister Goeran Persson — tentatively scheduled to meet with Arafat next week — only will make the trip if the Cabinet is confirmed, Swedish diplomats said.
A Western diplomat said on condition of anonymity that the European visits were meant to keep the road map from being overshadowed by the war in Iraq (news - web sites).
