Frank-Walter Steinmeier told a German Sunday newspaper that a resolution was still far off but several developments had given rise to hope, such as the Ukrainian presidential vote, or the first meeting between the Russian and Ukrainian presidents.
"But there can only then be real progress when there are direct, substantial talks between Moscow and Kiev," Steinmeier said in an interview with Tagesspiegel.
"That'll be our message when (Polish Foreign Minister) Radoslaw Sikorski and I speak with the Russian foreign minister Sergei Lavrov in St Petersburg on Tuesday," he added.
The meeting was agreed in January on the sidelines of the Munich Security Conference before the crisis erupted but it is set to dominate the talks, a foreign ministry spokesman said last week.
Steinmeier also urged the Ukrainian government to retain a "sense of proportion" in its military operations against insurgents.
"The result of military operations in eastern Ukraine must not be that the separatists attract more members," he said.
He added that "in such a tense situation it is wise to proceed with the deployment of military means with caution and a sense of proportion".
And he called on both Russia and Ukraine to secure their common borders to prevent weapons and fighters crossing into eastern Ukraine.
To calm the situation in the Donbass region, which is largely in rebel hands, Russia should "publicly support Ukraine's territorial unity and refuse all attempts at separation", Steinmeier added.
German Chancellor Angela Merkel met Russian President Vladimir Putin on the sidelines of D-Day ceremonies Friday and called on Moscow to "live up to its responsibility" to ease the Ukraine crisis, her spokesman said.
Ukrainian President Petro Poroshenko and Putin also met informally on the sidelines of the D-Day commemorations.