Merkel's comment in Brussels, Belgium, where she is to meet with other EU leaders, came as German Foreign Minister Guido Westerwelle summoned U.S. Ambassador John Emerson to Berlin to discuss the report of U.S. wiretapping, Spiegel Online reported.
The Guardian newspaper reported Thursday the U.S. National Security Agency monitored telephone conversations of 35 world leaders, using phone numbers provided by an official within another government department.
Citing a classified document provided by former NSA contractor Edward Snowden, the newspaper said the NSA encourages senior officials at the White House, the State Department and the Pentagon to share telephone contact information to facilitate surveillance of foreign leaders.
"We need trust between allies and partners, and such trust needs to be restored," Merkel told reporters in Brussels Thursday.
She said she had told President Barack Obama as much in a telephone conversation Wednesday, the BBC reported.
Foreign Ministry sources told Spiegel Online that Westerwelle was expected to stress the "incomprehension and outrage" over the reported electronic monitoring of a close ally and partner.
The White House said Wednesday Obama assured Merkel Wednesday the United States "is not and will not" monitor her communications.
Der Spiegel reported the surveillance, based on a review by the Federal Intelligence Service and the Federal Office for Security in Information Technology.
A National Security Council spokeswoman told Der Spiegel Obama assured Merkel "the United States does not monitor" her communications, but the publication noted the U.S. spokeswoman did not say whether the denial applies to possible past surveillance.
Dutch Prime Minister Mark Rutte said the alleged spying on Merkel was "serious," the BBC reported.
"I will support her completely in her complaint and say that this is not acceptable," Rutte said. "I think we need all the facts on the table first."
"We have to get clarification of what has happened and we also need a guarantee that this will never happen again, if it has happened," said Finnish Prime Minister Jyrki Katainen.