She stressed however that Erdogan had engaged in the talks and that the gathering "honoured" Turkey's role in managing the migrant crisis driven by Syria's civil war and other conflicts.
Turkey's sweeping arrests of alleged state enemies after last year's coup attempt and a dispute centred on a NATO base "are developments which I of course raised that show deep differences," Merkel said.
"And we didn't sweep those under the table."
Berlin-Ankara relations have been fraught, deteriorating sharply over Turkey's mass crackdown after the failed putsch against Erdogan last year and a host of other civil rights controversies.
And last month Germany decided to withdraw its troops who support the fight against the Islamic State group in Syria from NATO partner Turkey's Incirlik base and move them to Jordan after German lawmakers were prohibited from visiting the base.
Erdogan lashed out on the eve of the summit, warning Germany it was "committing political suicide", by refusing to let him address members of the large ethnic Turkish community in a rally during the G20.
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