While it lacked the raucous free-for-all quality of the familiar British version of the tradition, Wednesday's session marked the first time the German chancellor has faced members of parliament for a direct interrogation.
Wednesday marked the first time Merkel took questions in the Bundestag since she became chancellor 13 years ago.
Three question-time sessions are planned each year. She also recalled her recent visit to Sochi.
She said Russia's readmission to such a format is not now feasible. She said Russia's removal was "unavoidable".
"It is apparent that we have a serious problem with multilateral agreements here, and so there will be contentious discussions", Merkel said.
"I think we will come toward each other with reforms to the currency union, but these reforms to the currency union are really not the only reforms we need", she said, mentioning foreign, asylum, migration, development and security policies.
Trump says does not endorse G7 communique, after ‘weak’ Trudeau comments
But in a tweet after flying out of Canada, the U.S. president showed he was in no mood to back down in any trade dispute. He said he gets along well with German Chancellor Angela Merkel , French President Emmanuel Macron , and Trudeau.
Merkel vowed to enter the talks "in good faith" but stressed that there must be "no compromise for its own sake" and that a final statement by the host Canada, rather than a joint communique, "may be the more honest way".
She said she would try to discuss differences with the US over Iran and trade tariffs with Trump.
Merkel, who appeared unimpressed by Netanyahu's remarks about a looming genocide by Iran against Israel, reiterated that Berlin remains committed to the terms of the Iran nuclear deal signed by China, Russia, France, Britain, the United States and Germany in 2015. Lawmaker Gottfried Curio accused the chancellor of being responsible for "the import of Islamists" and "endless human suffering at the hands of rapists and murderers".
"When will you resign?" asked lawmaker Gottfried Curio.
Merkel calmly replied that "in an exceptional humanitarian situation, Germany behaved very responsibly".