Merkel pointed out the urgency of establishing an international contact group, which will find a political way to end the conflict in Ukraine, Xinhua quoted German government spokesperson Steffen Seibert as saying in a statement.
She also stressed that the scheduled referendum in Crimea, an autonomous republic of Ukraine, is illegal and violates the Ukrainian constitution and international law, the statement added.
The mostly Russian-speaking Crimea, home to Russia's Black Sea Fleet, has become the epicenter of the ongoing crisis in Ukraine since President Viktor Yanukovych was ousted by parliament on Feb 22.
Commenting on the simmering tensions in Crimea, Russia said on Friday that they did not expect a new cold war and the West and Moscow could seek some common ground to solve the Ukraine crisis through dialogue.
Referring to the planned referendum, Russia said it reflected the common will of the Crimean people.
The Crimean parliament on Thursday voted to become part of Russia. The parliament session also set a referendum on March 16, which would ask whether the Crimean people would like to remain part of Ukraine or join Russia.