Islam classes was one of a series of proposals discussed at the day-long meeting between representatives of the Muslim community and officials from the German government and federal states.
Schaeuble said the Islam Conference had a responsibility to cultivate a "common understanding of how we can co-exist."
The meeting, the third in the past 18 months, reviewed ideas presented by four working groups designed to improve the integration of Germany's 3.4 million Muslims, half of them Turks.
In his opening speech, the interior minister conceded there were still differences between the two sides, but denied there was a major dispute about values.
Under the plans, Germany's federal states, who are responsible for education, would supervise the religious instruction, which would be carried out in German by state-approved teachers.
"We have freedom of religion. That means there is equality and as a result of this it is possible to introduce religious instruction for Islam," Schaeuble said ahead of the talks.
One of the conditions for this is that Muslims in Germany organize themselves as a religious community under Germany's religious incorporation laws, said Schaeuble.
Unlike Christian churches, Islam is not recognized as a religious community in Germany.
A spokesman for the Coordination Council for Muslims in Germany, Bekir Alboga, called the introduction of Islam classes "a big step forward."
The head of Germany's Protestant Church organization EKD, Bishop Wolfgang Huber, also welcomed the move.
Thursday's meeting followed a debate on relations between Turks and Germans in the wake of an apartment block fire which killed nine Turks in the southern city of Ludwigshafen.
Initial reports in the Turkish press spoke of arson, but an investigation claimed "no evidence that the February fire had been started deliberately".
A survey published in Germany's Die Ziet magazine this week showed three-quarters of the Turkish community feels that Chancellor Angela Merkel does not speak for their interests.
The government's commissioner for integration, Maria Boehmer, said the results showed "that we have a lot to do to increase the sense of belonging among migrants of Turkish origin."
The Emnid survey found that 58 per cent of Turks felt unwanted in Germany and 44 per cent were opposed to intermarriage with Germans.
In line with a recent call by Turkish Premier Recep Tayyip Erdogan for Turks not to abandon their identity, 92 per cent said "Turks in Germany should maintain their own culture."
Last Mod: 14 Mart 2008, 12:49