Britain's relations with Germany are closer than ever but Berlin should toe the line on Iraq, the foreign secretary has said.

In a speech to German British Forum, Jack Straw, highlighted "fundamental" agreement between the two countries on most EU issues.

"Today this partnership has never been stronger," he told the Westminster audience.

"We may differ on individual aspects of EU policy, but we share a strong commitment on the fundamentals: a reunified Europe which delivers practical benefits to our citizens, be they jobs and investment or cleaner beaches and safer streets."

But the foreign secretary highlighted divisions on key issues - reminding Germany of its commitment to peacekeeping and European security.

As Berlin resists NATO calls for boosted defence spending and the US-led drive against Iraq, his comments will be seen as a move to counter Germany's opposition to war.

"We agree on the importance of Europe having a stronger voice in the world," he said.

"Today Germany is a pillar of international peacekeeping, with over 10,000 troops bringing peace and security to the European continent and beyond."

Straw praised Germany's involvement in "noble" overseas peace missions - a once sensitive issue after the Nazi era.

"In recent years, peacekeeping has become one of Europe's most noble missions," he said.

"In Afghanistan, Turkey succeeded Britain as the leader of the International Security Assistance Force. I am delighted that Germany will be taking on this role, making a vital contribution to the campaign against terrorism."

But he warned that Germany could not take a pick-and-mix approach to the international security agenda.

"No issues are of greater international importance than our collective response to the three main threats to our security: the proliferation of weapons of mass destruction; the scourge of global terrorism; and failed and failing states," Straw said.

"Iraq epitomises the threat posed by weapons of mass destruction," he told the forum.

Berlin could not square support for a strong international community with opposition to moves against Iraq, the foreign secretary insisted.

"None of us wants military action. But the only chance of resolving this issue peacefully is by making clear that we are prepared to use force," he said.

"We in Europe have long supported multilateral organisations and the system upon which they are founded.

"We have an obligation to ensure that Iraq does not continue to flout the authority of the United Nations."

Straw reiterated the continuing relevance of NATO to the post Cold War world.

"It's difficult to believe that only 12 years ago some commentators were predicting the demise of NATO," he said.

"It was said that the inexorable, peaceful advance of the values of western, liberal democracy would render NATO's military purpose redundant."

Linking intervention in the former Yugoslavia - which was backed by Germany - to Iraq, Straw insisted that a strong alliance was more important than ever.

"Saddam Hussein and Slobodan Milosevic swiftly shattered any illusions that the alliance had entered Kant's world of "perpetual peace"," he said.

"Allied intervention in the Balkans and more recently in Afghanistan has confirmed that NATO will continue to shoulder a heavy burden as guardian of peace and security in Europe and beyond."

But Straw cautioned Germany that if NATO "is genuinely to count for something, if it is to be credible, then it must also be capable".

"Allied intervention in Kosovo highlighted embarrassing gaps between the capabilities of the United States and the European members of NATO, hardly surprising given that many defence budgets on this side of the Atlantic have slipped below 2 per cent of annual GDP," he said.

Some European capitals - including Berlin - have cut key defence budgets, a situation Britain regards as a "recipe for resentment".

"I am not proposing that Europe embarks on a spending spree to match US expenditures. This is neither feasible nor desirable," Straw said.

"But an alliance where one side is increasingly asked to shoulder a disproportionate military burden is a recipe for resentment."

"If we are to preserve the integrity of the most successful military partnership in history then Europe must do more, not least by increasing its military expenditures."