Merkel said that since attacks had also struck other European countries, including France, Spain and Germany, "this is a challenge which we all face".
"That's why we're united with Britain, with the British government and, above all, with the people of Britain," she said, adding that not all the circumstances of the latest attack were known yet.
"Our thoughts are with the British people and (the attack) strengthens our resolve to continue and boost international cooperation in the fight against Islamist terrorism," said Merkel.
British police said they were treating the bomb blast as a "terrorist incident", but there had not been any confirmation that the attack was carried out by Islamists.
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