Russian President Vladimir Putin danced arm-in-arm with Austria's foreign minister Karin Kneissl at her wedding on Saturday, after receiving an invitation that opposition critics said undermined the West's stance against Moscow. Few details were revealed.
Merkel said this will be a working meeting and called not to expect much from the talks.
On Ukraine, Merkel said the two leaders would discuss the possibility of a United Nations peace mission for eastern Ukraine. "If it's possible to take a step forward on Syria, energy issues or Ukraine, it will be good for Germany as the leader of Europe".
Former British foreign secretary Boris Johnson said last September that the US, Britain, and their allies would not support Syria's reconstruction as long as President Bashar al-Assad remained in power.
A spokesman for Merkel said this week that the European Union was still in talks with Russian Federation to ensure that Ukraine continues to play a role in the lucrative energy transit business even after Nord Stream 2 is completed.
Ukraine worries that the Nord Stream 2 Baltic Sea pipeline from Russian Federation to Germany will transport gas now flowing through its territory and deprive it of crucial transit fees.
He also made a toast to the newlyweds in German, the Kremlin said, and left the wedding after about an hour to head for a meeting with German Chancellor Angela Merkel outside Berlin.
Putin told reporters that such a move had to make sense for Moscow from a business perspective.
"Although we must state that there is still no stable ceasefire", she said. "Nord Stream 2 is exclusively an economic project".
"Ukraine must, in my opinion, play a role in the transit of gas to Europe", even after the start of Nord Stream 2 in 2019, the German chancellor said.
The United States is pressing Germany to halt work on the pipeline, arguing that it will increase Germany's dependence on Russian Federation for energy.
But Merkel has maintained that the Nord Stream project is an economic, not political matter for Germany.
Peskov confirmed that Nord Stream was brought up during the talks.
Yet the foreign ministry insisted that Putin's visit "will not change anything in terms of Austria's foreign policy positions".
The Kremlin views divisions between the U.S. and Europe over trade and the Iranian nuclear deal as a chance for Russian Federation to mend relations with Germany by presenting itself as a more reliable partner in negotiations.
Turkey and the USA have been locked in a heated crisis emanating from unjust sanctions and the actions of Trump, as Washington levied sanctions on Interior Minister Süleyman Soylu and Justice Minister Abdulhamit Gül for not releasing American pastor Andrew Brunson, who faces terrorism charges in Turkey. "After Trump met Putin while attacking Merkel and the German economy", she needs to have her own contact with Putin.