U.S. President Barack Obama says it is only a “matter of time” before Libyan leader Moammar Gadhafi gives up power.

Mr. Obama spoke Tuesday at the White House, alongside German Chancellor Angela Merkel. He said he and the German chancellor have been clear that Mr. Gadhafi must step down and hand power to the Libyan people.

The U.S. president said the NATO-led mission in Libya has made “significant” progress, protecting the people from a “potential slaughter” by Mr. Gadhafi's forces.

Germany has kept its troops out of the operation, but President Obama said Germany's deployment of additional resources and personnel to Afghanistan has allowed other NATO allies to increase their support for the Libya mission.

Chancellor Merkel said Germany is “of one heart” with its NATO allies in supporting the operation in Libya. But she acknowledged that the U.S. and Germany may sometimes have differences of opinion.

Among other issues the two leaders discussed were economic policy, Afghanistan and the Middle East peace process.

President Obama said they agreed that Iran's nuclear program remains a very serious concern, and that the country faces the threat of additional international sanctions if it continues to ignore its international obligations.

Mr. Obama said he and the chancellor also agreed that Europe's debt crisis must be contained. President Obama said a Greek default on its debt would be “disastrous.”

Mr. Obama said they also discussed their support for political and economic reform across the Middle East and North Africa, especially in Tunisia and Egypt. He said they agreed this historic moment “must not be squandered.”

Mr. Obama is honoring Ms. Merkel with all the pomp and ceremony of a state visit, including an elaborate White House arrival ceremony Tuesday that featured a 19-gun salute.

Speaking at the ceremony, President Obama called Germany one of the United States' strongest allies and Chancellor Merkel one of his “closest global partners.” Ms. Merkel said the United States and Germany share the same values, which she said are “democracy and freedom, rule of law and the universality of human rights.”

She highlighted several areas of mutual interest and cooperation, including achieving a peaceful and stable Afghanistan, keeping Iran from developing a nuclear weapons capability, weathering the global economic crisis, and supporting what she described as the “struggle for freedom” in North Africa.

The visit by Germany's first female chancellor comes as her nation struggles with an outbreak of E. coli bacteria that has killed at least 22 people and sickened 2,200 others.

Mr. Obama will honor Ms. Merkel later Tuesday with a formal dinner at the White House. He will present her with the U.S. Medal of Freedom, the country's highest civilian honor.