ALGIERS, July 17, 2008 (AFP) - Germany and Algeria wound up two days of talks in Algiers Thursday with a call for more economic cooperation between the two countries.

Speaking after a meeting with Algerian President Abdelaziz Bouteflika and other ministers, German Chancellor Angela Merkel described bilateral relations as 'excellent.'

'We have stated that the economic cooperation between the two countries can be improved more,' she told journalists.

The discussions also focused on strengthening military cooperation between Germany and Algeria, according to the Algerian APS news agency.

'The talks covered the ways and means of reinforcing and consolidating military cooperation between the two countries,' it said in a report.

Algerian Foreign Affairs Minister Mourad Medelci and Energy and Mines minister Chakib Khelil were among those also present during the discussions.

Berlin wants to explore the possibility of selling military equipment to Algeria and training the country's army officers, according to the independent dailies Al Watan and Le Quotiden d'Oran.

The Algerian army is currently supplied by Russia but is being courted by France and the United States. According to another newspaper, Le Jeune Independant, Germany is also interested in selling Algeria frigates and a border surveillance system.

Earlier, local officials said the talks would also focus on boosting gas supplies to Germany.

Germany's deputy economy minister Bernd Pfaffenbach, who was accompanying Merkel, said on Wednesday evening at an economic forum that Germany wanted Algeria to increase its supply of gas to Europe, in particular to Germany, although he did not elaborate.

Germany currently imports more than 40 percent of its gas needs from Russia, and only one percent from Algeria.

Bouteflika has repeatedly called for greater economic cooperation and for German firms to set up offices in his country in addition to the 160 already present.

Merkel's visit has been seen in Algeria as a sign that Berlin wants to boost ties with North Africa. It is the first visit by a German chancellor since her predecessor Gerhard Schroeder came in 2004.