Angela Merkel has condemned the outbreak of far-right protests in eastern Germany, telling the Bundestag in an unusually passionate address that shouting Nazi slogans and committing acts of violence are inexcusable.

The German chancellor was heckled during a lively Bundestag debate by the head of the anti-immigrant Alternative for Germany party (AfD), Alexander Gauland, who accused her of dividing Germany with her immigration policy, endangering peace and spreading fake news by supporting controversial evidence that far-right protesters were hounding foreigners through the streets.

In response, Merkel told Gauland that while she acknowledged the anger felt after the death of a man in Chemnitz who was allegedly stabbed by two asylum seekers, “there is no excuse or explanation for rabble-rousing, in some cases the use of violence, Nazi slogans, hostility towards people who look different, to the owner of a Jewish restaurant, attacking police”.

Merkel also responded to the row gripping Germany over Hans-Georg Maaßen, the head of the BfV domestic intelligence agency, who questioned the use of the word “Hetzjagd” – meaning hounding – by Merkel’s spokesman to describe what happened to foreign people in Chemnitz.

“Abstract rows about ‘Hetzjagd’ are not helpful,” Merkel told parliament. Minutes beforehand, Gauland had accused Merkel of “spreading fake news when your spokesman spoke of ‘Hetzjagd’”, adding: “The truth is, there was no hunting down of people in Chemnitz.”

In an interruption to Gauland, allowed under the rules of Bundestag discourse, Martin Schulz, the former leader of the Social Democrats, referred to him as “belonging to the dungheap of German history” over what he saw as the AfD’s contribution to the spread of anti-immigrant sentiment.

Later on Wednesday, Maaßen will face questioning by the government’s interior affairs committee over remarks he made to a newspaper in which he questioned the veracity of a video allegedly showing protesters chasing foreigners.

Fear in Chemnitz: 'I’m used to neo-Nazis, but not my neighbour mixing with them in broad daylight' Read more

A police report compiled during the night of the protest in question emerged on Wednesday that appeared to support claims that rightwing extremists chased foreigners through the streets.

According to the document, uncovered by an investigative journalism programme, from 7pm onwards several officers on the scene reported witnessing an increasing number of hooligans arriving in the city. At 9.42pm the observation was made that “masked persons (right-wing) are looking for foreigners”. At 9.47pm, “20 to 30 masked persons armed with stones” were reported to be “heading towards Brühl, to the Schalom restaurant”.

As referred to by Merkel in her speech, the Jewish restaurant was attacked, a window was smashed and its owner, Uwe Dziuballa, was injured after being hit by a stone. Masked men shouted at him: “Clear out of Germany, you Jew-pig.”

The programme, Frontal 21, revealed that one of the men in the video at the centre of the controversy had worked as a security guard at a refugee shelter in Chemnitz, but that his employer, Securitas, had sacked him with immediate effect after his identity was made known to the company. The man is said to be appealing his dismissal.

Merkel’s government has faced mounting accusations that it is failing to tackle the fallout from Chemnitz or deal with the threat of far-right protests, which have spread to the cities of Köthen and Halle.

Wolfgang Schäuble, the president of the Bundestag, went on national radio on Wednesday to defend the government’s decision in the late summer of 2015 to allow almost 1 million refugees into Germany.

Schäuble denied it had been a mistake, arguing that Germany had responded to an urgent situation in which a large number of refugees who had arrived in Europe needed help.

“But what we didn’t manage well enough was to prevent the impression the whole world was under: that now everyone, anywhere, who was living somewhere worse than Germany, could come. That’s what you always have to consider in politics, the impact of your communication,” he said.

• This article was amended on 13 September 2018 to change the translation of the German word Hetzjagd to hounding, rather than hunting.