John Emerson was asked by German public broadcaster ZDF about reports that the National Security Agency conducted mass surveillance of German communications including tapping Chancellor Angela Merkel's phone over several years.
"As far as I am aware there is nothing we're doing that is a violation of law," he said, without specifying whether he meant US or German law.
Merkel angrily confronted US President Barack Obama last week with allegations that the NSA was snooping on her phone, saying it would amount to a "breach of trust".
Federal prosecutors have opened a preliminary investigation into whether German laws were broken during US surveillance operations.
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Emerson said Washington was keenly aware of the extent of the diplomatic damage the revelations had wrought.
"I fully understand the depth and the intensity of the reaction both in the German government and in particular among the German people to these allegations -- especially the allegations over the last few days," he said.
"I have communicated in great detail and specificity those concerns back to the United States government and in particular back to the White House and they are being taken very seriously."
"We need to continue these strong and important conversations that we have between the top levels of the German government and the top levels of the American government to determine how we can best work together with our intelligence agencies to combat terrorism, keep our people safe, but respect the privacy of individuals and behave in a way that you would expect friends and allies to behave," he told ZDF.
Elmar Brok, chairman of the European Parliament's committee on foreign affairs, told reporters in Washington yesterday that NSA chief Keith Alexander had admitted to the EU delegation that America had targeted Merkel.