The German authorities have summoned the US ambassador in Berlin after a man was arrested on suspicion of spying.
The US diplomat "was asked to help in the swift clarification" of the case, the foreign ministry said.German officials confirmed the arrest but released no other details.
US-German ties were strained after allegations last year that the US National Security Agency (NSA) bugged Chancellor Angela Merkel's phone as part of a huge surveillance programme.
The scale of the agency's global spy programme was revealed in documents leaked by a former intelligence contractor, Edward Snowden.
The BBC's Stephen Evans in Berlin says the new allegation of American spying on an ally may make it harder for the US to get German help in its efforts to oppose Russian activity in Ukraine, and also to control Iranian nuclear ambitions.
'Zero trust' The man arrested on Wednesday is a 31-year-old German employee of the federal intelligence service, the BND or Bundesnachrichtendienst, federal prosecutors say.
He was held on suspicion of spying for foreign intelligence services. Prosecutors did not identify the suspect - or foreign services involved.
Media reports suggested the suspect - a man with a mid-level rank at the BND - had been spying for the US for a period of two years.
He was said to have been involved in the German parliamentary investigation into the activities of foreign intelligence agencies, including the NSA.
Originally, the reports said, he had been suspected of spying for Russia.
Source BBC News
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