The suspect, who was shot dead by police on Sunday, was identified as 21-year-old German citizen Abdul Ballout, who was recently convicted of preparing a violent act and was believed to have tried to join the Islamic State militant group.
"It is still too early to say what political conclusions we will draw from this brutal attack. ... We will have to respond with prudence, but also with determination," Merz said at a party press conference.
One person died in the attack in the Tiergarten park near the Brandenburg Gate on Saturday evening, whom Poland's foreign minister identified as a Polish woman aged about 60.
Bild newspaper said the victim was visiting the Christopher Street Day celebrations with her daughter, who herself suffered injuries.
Suspected attacker Ballout was a German citizen with Lebanese roots and born and raised in Berlin, according to Germany's interior minister.
Police said they opened fire on him on Sunday when he ran towards officers armed with a bladed weapon.
In May, Ballout was convicted of preparing a serious act of violence endangering the state and was sentenced under juvenile law to one year and 10 months in prison, according to prosecutors.
He was released under the supervision of a probation officer for six months after the court deferred a decision on whether to suspend the sentence.
Prosecutors had appealed the ruling, seeking a longer sentence.
Merz said police surveillance of convicted criminals was regional states' responsibility but added he had tasked the federal interior minister with looking into changing jurisdiction.
The German leader also questioned how the suspect was able to approach the event despite supposedly being under constant surveillance.
A second suspect detained in connection with the attack has been released, the German federal prosecutors' office said on Monday.
Spiegel magazine cited sources as saying that authorities released the person because initial suspicion that he was a passenger in the ramming vehicle attack could not be confirmed.
