German Chancellor Angela Merkel demanded answers from President Barack Obama on Wednesday after learning US spies may have monitored her phone, warning this would be "breach of trust" between allies.
The White House, rattled by the latest exposure based on leaks from intelligence contractor Edward Snowden, said it is not now listening in on Merkel, but did not deny the possibility her communications may have been intercepted in the past.
In the wake of Snowden's ongoing revelations, several more key US countries have already complained about American electronic surveillance, and the White House is struggling to stem the diplomatic damage.
A spokesman for Merkel, who has registered strong disapproval at US National Security Agency activities in the past, said his boss had called Obama after Germany received information that US intelligence may be spying on her mobile phone.
Steffen Seibert said in a statement that Merkel "made clear that she unequivocally disapproves of such practices, should they be confirmed, and regards them as completely unacceptable".
She had demanded "an immediate and comprehensive explanation" from Washington, the statement said.
"Among close friends and partners, as the Federal Republic of Germany and the US have been for decades, there should be no such monitoring of the communications of a head of government," the statement added, indirectly citing Merkel's comments to Obama.
"This would be a serious breach of trust."
"Such practices must be stopped immediately," the German chancellor told Obama, the statement said.
The White House, embarrassed by the latest allegations of NSA spying on foreign leaders, came up with a hurried response to the telephone call.
"The President assured the Chancellor that the United States is not monitoring and will not monitor the communications of Chancellor Merkel," said White House spokesman Jay Carney.
Carney was then asked whether US spies could have inadvertently picked up Merkel's communications during a wider sweep of global telephone calls linked to a vast anti-terror program.
He repeated the linguistic formulation of his earlier answer, in a way that did not deny the possibility that the NSA had indeed accessed Merkel's conversations in the past.
Carney stressed that Obama was reviewing the way Washington gathers intelligence "so that we properly balance the security concerns of our citizens and allies with the privacy concerns that all people share."
The latest allegations came as the French newspaper Le Monde stood by claims that Washington had monitored millions of phone calls inside France.
Washington has said many of Le Monde's claims were false, but Obama had another embarrassing call with a foreign leader when he spoke to French President Francois Hollande on Monday.
German and US intelligence agencies cooperate closely on counter terrorism efforts and other matters related to espionage.
US officials have privately said that all nations, including its allies, conduct intelligence sweeps against foreign leaders -- and assume that Obama is a target of such activity.
But the Merkel revelations were the latest extreme embarrassment for Obama over the NSA affair, which has seen claims of US snooping on foreign leaders in Mexico and Brazil and reports US spy agencies have monitoring millions of telephone calls worldwide.
Brazilian President Dilma Rousseff last month cancelled a state visit to Washington over the scandal.
The latest revelations also threatened the personal trust and close cooperation between Obama and Merkel, which saw the US leader pay a long-awaited visit to Berlin earlier this year.
Obama considers the newly reelected German leader as one of his closest allies and friends on the world stage and has frequently spoken of his respect for her.
But the NSA story caused Merkel some discomfort during her reelection campaign and she publicly raised the issue with the US president.
The idea of spying on personal telephone conversations carries special poignancy in Germany, where memories remain fresh of the surveillance conducted on ordinary citizens by the East German Stasi Secret Police agency during the Cold War.
News of the eavesdropping suspicion and the stern German protest came first from Spiegel Online, whose parent magazine reported many of the US surveillance claims made by Snowden.
Spiegel Online said research by the news weekly had tipped the German government off to the potential surveillance, which authorities including the foreign intelligence service BND had considered "sufficiently plausible" for Berlin to confront Washington on the question.
Another US ally, Mexico, is also bristling at reports the United States spied on personal communications of current and past leaders.
Former Mexican leader Vincente Fox said Wednesday that he was spied on by the United States following reports that US intelligence agencies snooped on President Enrique Pena Nieto and his predecessor Felipe Calderon.
Pena Nieto, who took power in December, has ordered an investigation into reports that the National Security Agency hacked his emails while he was a candidate last year and Calderon's messages while in office.