By Michael Hogan
HAMBURG, Germany (Reuters) - Prime Minister David Cameron defended Britain's desire to protect its sovereignty on Friday, appealing for understanding from the European Union in his talks for better membership terms that could be decided next week.
At a dinner in German city of Hamburg with Chancellor Angela Merkel and civic and business leaders, Cameron said he knew some may see Britain as "argumentative and rather strong-minded" by trying to renegotiate its terms with the 28-member bloc.
But he underlined that he believed the reforms he was pursuing would help Germany and the rest of the EU, while he made "no apology" for Britain's need to protect its sovereignty - a possible signal to his more euroskeptic allies at home that he may yet find a way of securing the supremacy of parliament.
"We have the character of an island nation - independent, forthright, passionate in defense of our sovereignty - and of institutions that have served us well for many hundreds of years," he told dozens of guests in the banquet room of Hamburg city hall.
"But we are also an open nation ... And I never want us to pull up the drawbridge and retreat from the world."
Cameron reiterated that he wanted Britain to stay in a reformed European Union and was fighting hard to address the concerns of the British people before a summit on Feb. 18-19 where he hopes to clinch a deal with his EU peers.
British and EU negotiators say much of the reform package has been agreed, but Cameron will have to settle tricky final issues, such as on migration where the British leader hopes to be able to curb benefits for EU workers.
He must also convince many in his Conservative Party that a draft deal agreed with European Council leader Donald Tusk offers the fundamental change in relations that he has promised.
Many euroskeptics have described the draft deal as one which does little to bring back any meaningful powers from Brussels, and are poised to start campaigning to leave the EU before a referendum which could take place as early as in June.
But some of his allies suggest Cameron may have something else to offer to defuse the criticism.
He has suggested he would do more to assert the sovereignty of Britain's parliament within the European Union, a possible bid to keep some high profile skeptics, such as popular London Mayor Boris Johnson, on board.
Cameron told the dinner he hoped to secure safeguards for countries outside the 19-member euro zone and an understanding that "we should be able to run our own welfare systems".
"So if by working together we can achieve these changes, then I will unequivocally recommend that Britain stays in a reformed European Union on these new terms," he said, adding his oft-repeated mantra; "Of course, if we can't then I rule nothing out."
(Additional reporting and writing by Elizabeth Piper; Editing by Alistair Bell)