German Chancellor Angela Merkel Wednesday began a two-day visit to Algeria which local officials said would focus on boosting gas supplies to Germany.

Merkel was greeted on her arrival by President Abdelaziz Bouteflika, who 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.

Her discussions will also centre on military cooperation, according to Algerian media, including possible sales of German arms and an offer to help train Algerian troops.

Merkel was due to hold talks with Bouteflika on Thursday morning. On Wednesday evening she was to attend a forum of Algerian and German business leaders.

Algeria gets most of its weapons from Russia but is also being courted by France and the United States.

Germany currently imports more than 40 percent of its gas needs from Russia, and only one percent from Algeria. The two countries are also seeking deeper cooperation over renewable energy sources.

The German space agency this year signed an agreement on renewables with New Energy Algeria (Neal), a special solar energy subsidiary of the major Algerian gas suppliers Sonelgaz and Sonatrach.

Neal aims to build four hybrid gas and solar power plants by 2012 and four wind farms.

Merkel's visit was seen here 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.

"Today we have understood that the Maghreb is not the neighbour of a neighbour but our own," a German foreign ministry spokesman was quoted as saying by the Quotidien d'Oran newspaper.

Merkel was also due to seek an agreement to open a separate branch of Germany's overseas cultural organisation, the Goethe Institute, currently housed in the German embassy.