Angela Merkel has urged Europe to take in more refugees and said Islam is 'not the source of terror'.

Speaking at the Munich security conference, the German chancellor said Europe has an obligation to take displaced refugees from Syria and Iraq.

Mrs Merkel, who has been critical of a U.S. ban on travel from seven Muslim-majority countries, also underlined that Islam itself was not the source of terrorism.

Speaking at the Munich security conference the German chancellor said Europe has an obligation to take displaced refugees from Syria and Iraq

She added that battling extremism can only be done in cooperation with Muslim countries and vowed to work closely with Vladimir Putin's Russia to fight ISIS in the Middle East.

Europe's ties with Russia are challenging, but it is important to work with them in the fight against Islamist terrorism, she said.

Germany has taken in more than one million refugees displaced by the war in Syria but the country's policy came under particular scrutiny after the Berlin Christmas market massacre last year in which 12 people died.

After the attack former UKIP leader Nigel Farage said events such as that would be 'Merkel's legacy'.

Mrs Merkel will go to the polls in September against Social Democrat candidate Martin Schulz, the former European Parliament President.

New US Vice-President Mike Pence was also at the conference and reaffirmed the US' commitment to NATO.

Germany has taken in more than one million refugees displaced by the war in Syria but the country's policy came under particular scrutiny after the Berlin Christmas market massacre last year in which 12 people died

He said European allies needed to step up their spending on defence reinforcing the Trump administration's message that NATO members must 'do more'.

Germany is under increasing pressure to increase military spending. The 28 member countries committed in 2014 to spending two per cent of their gross domestic product on defense within a decade.

Mrs Merkel said she was ‘conscious of Germany's responsibility’ and would stick to the long-term aim of raising defence spending.

But added she was in no hurry to meet the Nato targets because there were other issues to deal with.