Merkel comments on Monday came as a group, calling itself Patriotic Europeans against the Islamization of the West, or PEGIDA, held weekly rallies in the eastern city of Dresden.
Around 10,000 took part in the rally last week, while 15,000 people marched on Monday in the latest show of strength for a growing far-right movement in Germany.
“There's freedom of assembly in Germany, but there's no place for incitement and lies about people who come to us from other countries,” Merkel told reporters in Berlin, adding, “Everyone (who attends) needs to be careful that they're not taken advantage of by the people who organize such events.”
PEGIDA organizers claim that they protest against extremism and not against immigrants or Islam; however, neo-Nazi groups and far-right parties have lent open support for the rallies.
Three PEGIDA organizers have criminal records, news weekly Spiegel reported, stressing that the group is being backed by the neo-Nazi and far-right football hooligan movements.
The number of refugees arriving in Germany has increased sharply because the country is Europe's most powerful economy and top destination for asylum-seekers and other migrants.
Last week three empty buildings which had been slated to house a number of asylum seekers were set on fire, and anti-foreigner slogans and swastikas were painted at one site in Vorra, near Nuremberg.
The chancellor has said Germany needs immigrants to avoid a demographic crisis in the country. But local officials have expressed their opposition to the inflow of a large number of asylum-seekers.
On Sunday, 15,000 people participated in a peaceful march in the western German city of Cologne against racism, xenophobia, and right-wing extremism.
Source: Press TV