Berlin (AFP) - German Chancellor Angela Merkel insisted on Monday that "we Europeans have our fate in our own hands", after Donald Trump criticised the EU and praised Britain's decision to leave the bloc.

Merkel also told reporters that she would work towards getting the European Union's 27 remaining member states to strengthen their economies and meet future challenges, including the battle against terrorism.

The German leader's comments came after the US president-elect branded the NATO alliance as "obsolete" and lashed out at a key EU-US nuclear deal with Iran.

In an interview with two European newspapers, Trump also took aim at Merkel's decision to let in refugees fleeing war in mostly Muslim nations, including Syria and Iraq, insinuating that this posed a security risk.

"I think she made one very catastrophic mistake and that was taking all of these illegals, you know taking all of the people from wherever they come from. And nobody even knows where they come from," Trump said, adding that he had "great respect" for the chancellor.

But Merkel said Trump had mistakenly conflated two separate issues.

"I would clearly separate (terrorism) from the existence of refugees in relation to the Syrian civil war. The Syrian civil war has been far longer, the majority of Syrians left their country because of the civil war, because of the fight against Assad or the oppression by Assad," she said, referring to Syrian President Bashar al-Assad.

"In addition to this is Islamist terrorism and that concerns all of us, but the civil war as such was in Syria first," said Merkel, who has also come under fire at home after 890,000 asylum-seekers arrived in 2015 alone.

Merkel shrugged off the latest comments, noting that Trump's position "is known".

"When he is in office, and at the moment that's not the case, we will work with the new American government and see what kind of agreements we can reach," she said.