The German government has obtained information that the United States may have monitored the mobile phone of Chancellor Angela Merkel and she called President Barack Obama on Wednesday to demand an immediate clarification, her spokesman said.
White House spokesman Jay Carney said Obama had assured Merkel that the United States was not monitoring the communications of the chancellor.
But the strongly worded statement by Merkel's spokesman suggested that Germany was not fully satisfied. It demanded an "immediate and comprehensive" clarification of U.S. surveillance practices.
"She made clear that she views such practices, if proven true, as completely unacceptable and condemns them unequivocally," the statement read.
"Between close friends and partners, as Germany and the U.S. have been for decades, there should not be such monitoring of the communications of a government leader. This would be a grave breach of trust. Such practices should be immediately stopped."
The news broke as Secretary of State John Kerry, on a visit to Rome, faced fresh questions about mass spying on European allies, based on revelations from Edward Snowden, the fugitive ex-U.S. intelligence operative granted asylum in Russia.
French President Francois Hollande is pressing for the U.S. spying issue to be put on the agenda of a summit of European leaders starting on Thursday. French newspaper Le Monde reported earlier this week that the National Security Agency (NSA) had collected tens of thousands of French phone records.
Just four months ago, Obama defended U.S. anti-terrorism tactics on a visit to Berlin, telling Germans at a news conference with Merkel that Washington was not spying on ordinary citizens.
Revelations before the trip of a covert U.S. Internet surveillance programme, code-named Prism, caused outrage in a country where memories of the eavesdropping East German Stasi secret police are still fresh.