Germany has summoned the U.S. ambassador to protest at allegations that Washington snooped on Chancellor Angela Merkel's mobile phone.
The claims are threatening to overshadow an EU summit starting in Brussels.
German Foreign Minister Guido Westerwelle will meet with U.S. envoy John Emerson later on October 24 in Berlin.
The U.S. Embassy in Berlin had not commented on the issue.
German Defense Minister Thomas de Maiziere told ARD television that the alleged spying would be "really bad" if confirmed.
He said, "The Americans are and remain our best friends, but this is absolutely not right."
Europe's biggest economy, Germany, has been one of America's closest allies. Thousands of American troops are still stationed in Germany.
Merkel has demanded a "complete explanation" of the allegations.
On October 23, Merkel called President Barack Obama to complain that U.S. intelligence may have monitored her mobile phone.
'Serious Breach Of Trust'
German government spokesman Steffen Seibert said Merkel told Obama that such practices -- if proven true -- would be "a serious breach of trust."
The White House said Obama assured Merkel that U.S. intelligence agencies are not monitoring her mobile phone.
White House spokesman Jay Carney told journalists: "[U.S.] President [Barack] Obama and [German] Chancellor [Angela] Merkel spoke by telephone regarding the allegations that the U.S. National Security Agency intercepted the communications of the German chancellor and I can tell you that the president assured the chancellor that the United States is not monitoring and will not monitor the communications of the chancellor. The United States greatly values our close cooperation with Germany.
He, however, did not explicitly deny that Merkel's phone was spied on in the past.
Carney said the U.S. is considering Germany's concerns as part of an ongoing review of how the United States gathers intelligence.
France, Brazil, and other countries have raised concerns about U.S. surveillance of their communications after Edward Snowden, a former National Security Agency (NSA) contractor, revealed the U.S. government collects vast amounts of telephone and Internet records worldwide.
French President Francois Hollande has called for the issue to be put on the agenda of the EU summit in Brussels, following reports that millions of French calls had been monitored.
Hollande and Merkel are expected to hold a separate meeting on the sidelines of the summit.
EU leaders are expected to take steps towards consolidating Europe's fragile economic recovery and the implementation of a single market in digital services. They are also likely to confer on illegal immigration to Europe.
Based on reporting by dpa, AFP, and AP