The alleged spies have infiltrated the German defense, development, economic, and interior ministries, reported Bild on Sunday, citing unnamed sources within the US intelligence community.

CIA interest in the Development Ministry stems from Germany's foreign intelligence agency, the BND, using the ministry as cover for clandestine operations.

Due to the diplomat row between Berlin and Washington, the spies are reportedly not meeting with their US handlers at the moment. US intelligence agencies are considering basing their recruitment activities in Warsaw or Prague due to the growing pressure in Germany, according to Bild.

'Fundamentally different views'

In an interview with public broadcaster ZDF, Chancellor Angela Merkel said that the US and Germany have "fundamentally different views" about how intelligence agencies should operate. She said partners should not spy on each other, while acknowledging that it would be difficult to convince Washington to change its ways.

Despite their differences, Merkel wants German and US intelligence agencies to continue cooperating.

"Germany profits from the cooperation concerning counterterrorism and other things," Merkel said.

US unapologetic over spy row

On Thursday, Berlin asked the CIA station chief to leave the country in response to US spying in Germany. Over the past two weeks, authorities have uncovered two Germans who allegedly were working for the US as spies.

In the first case, a BND employee allegedly sold more than 200 documents to the CIA for 25,000 euros ($34,000). He's admitted to spying for the US.

In a second case, an employee at the Defense Ministry has been questioned on suspicion of espionage. He's denied the allegations.

The US has been unapologetic over the spy row. White House spokesman Josh Earnest said that countries are aware of what intelligence agencies from allied nations are doing on their soil. He added that any disagreement should be resolved through private diplomatic channels, not in the media.

German Foreign Minister Frank-Walter Steinmeier is set to meet with US Secretary of State John Kerry in Vienna tomorrow for talks on Iran's nuclear program. Steinmeier said he would voice his concerns to Kerry about US espionage.

slk/crh (AFP, dpa, Reuters)