"We are aware that Europe's security can only be ensured, in the medium and long term, with Russia," Merkel said at a ceremony with Polish Prime Minister Ewa Kopacz in the southern Polish town of Krzyzowa.

"The sanctions are not a goal in themselves. They are applied only when necessary," Merkel said, in reference to sanctions on Russia over the conflict in Ukraine.

"We want to proceed with dialogue with Russia."

Krzyzowa is rich in the symbolism of the fall of the Iron Curtain across eastern Europe, ending the division between East and West, having hosted a landmark 1989 Polish-German meeting of reconciliation.

But today's talks came amid the worst tensions between the West and Russia since the Cold War, sparked by Moscow's role in the crisis in Ukraine, Poland's eastern neighbour.

The West believes Russia is pulling the strings in the deadly seven-month conflict between pro-Western government forces and pro-Russian separatists in Ukraine's east -- an accusation the Kremlin denies.

Kopacz and Merkel on Thursday opened an exhibition on the often tragic history shared by Germans and Poles since the start of World War II in 1939, when Nazi Germany occupied Poland.

Animosity reigned throughout the Cold War, until a first gesture of reconciliation was made by German and Polish Roman Catholic bishops in 1965. Reconciliation began as communism fell in Europe in 1989.

"We are not the hostages of history. We can learn from it," Kopacz said. "Today, we meet in Krzyzowa as friends and partners."