By Mark Hosenball
WASHINGTON (Reuters) - After disclosures that the U.S. National Security Agency tapped German Chancellor Angela Merkel's cellphone, Washington and Berlin are discussing new rules to govern dealings between their spy agencies, U.S. and European officials said.
Senior German officials, including the chiefs of Germany's foreign intelligence service, the BND, and its domestic security agency, the BfV, met with Obama administration and U.S. intelligence officials last weekend to discuss how to reshape intelligence cooperation.
Current and former U.S. officials familiar with U.S. spy programs say the United States is likely to be willing to agree to some kind of pledge - either public or private - that American agencies will not engage in industrial or commercial espionage against German targets.
Such a promise would be an unusual step for the United States, but it would be easy for the Obama administration to make because current rules governing the National Security Agency and other U.S. spy agencies already prohibit spying for commercial benefit.
Washington would be much less willing to give the same sort of pledge to other allies, most notably France, which have large state-owned industries and a reputation for aggressive official industrial espionage, U.S. and European officials said.
The visit to Washington by the German officials followed revelations by German media, based on documents leaked by former NSA contractor Edward Snowden, that the NSA targeted Merkel's phone for eavesdropping. U.S. officials did not deny the report but said any such spying has now ceased.
A European official said Merkel was not particularly distressed at the revelations as she recognized her cellphone was an insecure means of communication and was careful and cryptic as to what she talked about on it.
Nonetheless, the public and political uproar caused by the affair and by other German media revelations based on Snowden's material - including alleged NSA spying on the United Nations and European Union - prompted German officials to seek urgent consultations with their American counterparts to review the rules for intelligence cooperation.
U.S. and German officials are working on a secret agreement to govern day-to-day intelligence dealings between the two countries, a European official said.
Caitlin Hayden, a spokeswoman for the White House National Security Staff, declined to provide details of the talks.
"We are open to discussions with our close allies and partners about how we can better coordinate our intelligence efforts, but I'm not going to get into the details of our diplomatic discussions," she said.
The secret agreement would be aimed at simplifying the relationship with Germany and strengthening rather than restricting cooperation between the two countries' spy agencies, officials said.
U.S. and German intelligence relations are currently run under a patchwork of agreements between individual U.S. spy agencies, such as the NSA, the Central Intelligence Agency and the National Reconnaissance Office, with the BND, or Germany's Federal Intelligence Service, which incorporates the functions of a multiplicity of U.S. agencies.
(Editing by Alistair Bell and David Brunnstrom)