(Adds detail on German delegation, German reaction)
By Roberta Rampton
WASHINGTON, July 4 (Reuters) - President Barack Obama sought to allay concerns from German Chancellor Angela Merkel about reported U.S. spying on European allies on Wednesday, and they agreed to hold a high-level meeting on the subject in coming days.
The European Union has demanded the United States explain a report in a German magazine that Washington was spying on its European allies, calling such surveillance shocking if true.
The reports came to light amid the imbroglio over former U.S. spy agency contractor Edward Snowden, who leaked details of surveillance activities by Washington. He is currently in limbo in a transit area of Moscow's airport as the United States pressures Moscow to expel him home.
A White House statement said Obama and Merkel spoke by phone, a conversation that took place two weeks after they held face-to-face talks in Berlin.
"The president assured the chancellor that the United States takes seriously the concerns of our European allies and partners," the White House said, noting U.S. and EU officials would discuss intelligence and privacy issues as early as July 8.
The leaders agreed to hold a meeting of U.S. and German security officials in the coming days to discuss the issue in greater detail.
German Interior Minister Hans-Peter Friedrich said Germany would send the sub-heads of German ministries to Washington - those below the level of deputy minister - and said they would assess the communication streams coming into Germany in a bid to protect German citizens.
Thomas Oppermann, parliamentary floor leader of Germany's opposition Social Democrats, criticised Merkel's choice of delegation, however.
"The Chancellor needs to hold proper government consultations," he told German television on Thursday.
"In the next week a government delegation of sub-heads of ministries will go to Washington so basically technocrats will be talking about this topic. It's a highly political issue."
The White House said Obama and Merkel reiterated their strong support for the launch of Transatlantic Trade and Investment Partnership negotiations, welcoming the soon-to-begin first round of discussions.
On Monday at a news conference in Tanzania, Obama promised to supply all the information requested by European allies regarding the spying allegations, which he said Washington was still evaluating.
"Every intelligence service, not just ours, but every European intelligence service, every Asian intelligence service, wherever there's an intelligence service, here's one thing they're going to be doing: they're going to be trying to understand the world better and what's going on in world capitals around the world from sources that aren't available through the New York Times or NBC News," Obama said. (Additional reporting by Steve Holland in Washington and Michelle Martin in Berlin; Editing by Lisa Shumaker and Hugh Lawson)