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"We are watching the increasing rhetorical escalation regarding the Korean Peninsula with the greatest concern," foreign ministry spokesman Martin Schaefer told reporters.
"That is why we call on all sides to use restraint."
Schaefer said Berlin was convinced a "military option" could not be "the answer in the quest for a nuclear weapon- free Southeast Asia".
And he backed a call by US Secretary of State Rex Tillerson to resume talks with Pyongyang if it halts ballistic missile tests.
"We must all continue our diplomatic efforts -- it is the only way to ensure that the threat of the illegal North Korean nuclear weapons programme can be contained," he said.
North Korea raised the stakes just hours later, saying it was considering missile strikes near US strategic military installations on the Pacific island of Guam.