In the video, two German-speaking ISIL members call on Muslims across Europe to join the Islamic State in Syria and Iraq and to wage Jihad in Germany and Austria, Die Welt reports.
One of the jihadists personally addressed Merkel and threatened to take out revenge upon her.
The Islamists say Germany will face retaliation for its participation in the anti-terrorist operations in Afghanistan and for arms shipments to those fighting ISIL.
The two militants in the video were identified by the newspaper as Abu Omer al-Almani from Germany and Mohamed Moahmoud from Vienna.
According to the Federal Office for the Protection of the Constitution, 720 people from Germany are currently fighting in the ranks of ISIL in Syria and Iraq.
On Wednesday, Director Hans-Georg Maassen said the flow of militants from Germany has risen since last year, but declined to comment on how the flow has changed in recent months.
They are active in Afghanistan and Yemen and have combined forces with Boko Haram, another equally vicious group operating in northern Nigeria and neighboring Cameroon.
The ISIL militants are notorious for their extreme brutality and numerous human rights atrocities, which include the beheading of members of religious minorities and foreign hostages, which they gratuitously post online.
