German Chancellor Angela Merkel issued a strong rebuke to the United States and Britain on Wednesday over sweeping surveillance and spying activities reported by fugitive IT contractor Edward Snowden.

German Chancellor Angela Merkel issued a strong rebuke to the United States and Britain on Wednesday over sweeping surveillance and spying activities reported by fugitive IT contractor Edward Snowden.

In a major speech to parliament ahead of talks with US Secretary of State John Kerry on Friday, Merkel said that Western powers sacrificing freedom in the quest for security were sending the wrong signal to "billions of people living in undemocratic states".

"Actions in which the ends justify the means, in which everything that is technically possible is done, violate trust, they sow distrust," she said. "The end result is not more security but less."

Merkel, whose own mobile phone was allegedly monitored by the US National Security Agency (NSA), is planning to travel to Washington in coming months for talks with President Barack Obama.

On Friday, she will hold talks with Kerry "on the transatlantic partnership and global political issues", her spokesman Steffen Seibert said.

Merkel stressed that "Germany could not wish for a better partner than the United States" but also conceded that the allies remain "far apart" on the "ethical question" of freedom versus security in state surveillance.

"Is it right that our closest partners such as the United States and Britain gain access to all imaginable data, saying this is for their own security and the security of their partners?" asked Merkel.

"Is it right to act this way because others in the world do the same?" she added before also touching on alleged British spying at international talks.

"Is it right if in the end this is not about averting terrorist threats but, for example, gaining an advantage over allies in negotiations, at G20 summits or UN sessions?

"Our answer can only be: No, this can't be right. Because it touches the very core of what cooperation between friendly and allied countries is about: trust."

Merkel said the reported revelations by Snowden, the fugitive former NSA contractor who remains in hiding in Moscow, had hit "with great force" half a year ago.

The chancellor, who grew up under communism in the former East Germany, reiterated that Berlin was now driving efforts for a European no-spying agreement and new rules to safeguard data privacy.

But she played down expectations for a similar deal with Washington, which has been reluctant to set a precedent fearing other countries would demand similar agreements.

"Many say the attempts for such an agreement are doomed to failure from the outset, an unrealistic endeavour. That may be," Merkel said. "Certainly the problem won't be solved by just one visit."

But she vowed she would continue to argue the case strongly.

"Billions of people living in undemocratic states today are looking very closely at how the democratic world responds to security threats -- whether it acts with self-confidence and prudence, or whether it cuts off the branch that makes it so attractive in the eyes of billions: the freedom and dignity of the individual."