Merz says Kyiv's key allies no longer limit range of weapons
Russia in response warned that such a move would be "at odds" of reaching a peace agreement.
Merz, who took office early this month, also vowed that "we will do everything in our power to continue supporting Ukraine, including militarily", in close coordination with other supporters.
"There are no longer any range restrictions on weapons delivered to Ukraine -- neither by the British nor by the French nor by us nor by the Americans," he said in a wide-ranging TV interview.
"This means that Ukraine can now defend itself, for example, by attacking military positions in Russia... With very few exceptions, it didn't do that until recently. It can now do that."
Merz did not specify at which stage which country, including his own, had decided on any changes, sparking some confusion.
Former US president Joe Biden decided in November 2024 to authorise Ukraine to use long-range Army Tactical Missile System, or ATACMS, against targets inside Russia.
Also in November, Ukraine fired UK-supplied Storm Shadow missiles into Russia for the first time, after being given the green light from London, British media reported at the time.
France, which has supplied Scalp missiles to Ukraine, reiterated at the time that strikes on military targets inside Russia were an option.
The Kremlin said on Monday after Merz's comments that any Western decision to lift range limits on arms delivered to Ukraine would be "dangerous".
"If these decisions have indeed been made, they are completely at odds with our aspirations for a political (peace) settlement... These are quite dangerous decisions, if they have been made," Kremlin spokesman Dmitry Peskov told Russian journalist Alexander Yunashev.
The previous German government of centre-left chancellor Olaf Scholz strongly backed Kyiv but shied away from sending it long-range Taurus missiles, worried that this might escalate tensions with the nuclear power.
Merz has in the past said he favours delivery of Taurus, but he did not say Monday whether Germany would now do so or whether he was referring to other weapons systems.
His new government has stressed it would no longer detail what arms it is sending to Ukraine, preferring a stance of strategic ambiguity.
The recently appointed chancellor however took the opportunity to slam Russian President Vladimir Putin's reluctance to engage in talks to end the sighting in Ukraine.
The Kremlin chief has responded to diplomatic efforts to bring the conflict to a close by prosecuting the war "harder than before", Merz told WDR.
"Putin obviously sees offers of talks as a sign of weakness," Merz said.
Since US President Donald Trump returned to the White House this year, he has sought to push the two sides in the conflict toward direct talks at the highest level.
Trump last week suggested the Vatican as a possible host for a meeting, with the Italian government saying the leader of the Catholic Church was ready to organise talks.
But Moscow has cast doubt on the potential for the Holy See as a host. Russian Foreign Minister Sergei Lavrov said it would be "inelegant" for the Catholic Church to mediate discussions between two principally Orthodox Christian countries.
Merz said that Ukraine's Western backers had sought to use all the diplomatic options available to them to initiate talks.
"After the last three weeks, no one can seriously accuse us of not having exhausted all available diplomatic means," Merz said. Short of "raising the white flag", Ukraine's supporters had "done everything" they could.
"If even an offer to meet at the Vatican does not get (Putin's) approval, then we must be prepared for this war to last longer than we all wish or can imagine."
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