The United States ambassador to Germany has been summoned to Berlin over allegations of phone tapping by American intelligence agencies.
German Foreign Minister Guido Westerwelle met American envoy John Emerson over allegations that United States intelligence agencies have been intercepting Mrs Merkel's mobile phone calls.
The US has said it is not monitoring Mrs Merkel's calls, but has not specifically denied listening in the past.
Mr Westerwelle told Mr Emerson Germany wants an honest and full explanation.
Mrs Merkel has also demanded a complete explanation of the claims, which are threatening to overshadow an EU summit, the BBC reports.
Arriving at the summit, Mrs Merkel said spying among friends is "really not on".
She said trust between the two allies now needs to be restored.