German Chancellor Angela Merkel said Thursday that Russia's actions in Ukraine had eroded mutual trust with the West, speaking on the eve of a major NATO summit in Poland.

"If through words and deeds the validity of (international) law and the inviolability of borders are questioned, then of course trust is lost," she told the German parliament.

When NATO leaders meet in Warsaw, "it will be in a phase in which the security situation has significantly changed in Europe," she said, also pointing at turmoil in Syria, Iraq and Libya.

The US-led alliance plans to finalise its biggest revamp since the collapse of the Soviet Union to counter what it sees as a revanchist and unpredictable Russia since the start of the conflict in eastern Ukraine and Russia's 2014 annexation of Crimea.

Among the plans is the deployment of four multinational battalions to the Baltic nations and Poland on a rotational basis.

Merkel said that "Russia's actions have deeply disturbed our eastern allies" and require a "clear reassurance" of their safety under NATO's Article 5 on collective defence.

The German leader -- a Russian speaker who has maintained dialogue with Russia's President Vladimir Putin throughout the Ukraine crisis, despite their differences -- also said the West must keep talking with Moscow.

"Deterrence and dialogue, the clear commitment to solidarity with our alliance partners pursuant to Article 5 of the NATO Treaty, and the outstretched hand of dialogue -- these are not contradictory, no they are indeed indivisible," she said.

A German government source who spoke on condition of anonymity said that the battalions' deployment would provide an "additional guarantee" requested by Russia's neighbours whose "fears are great" in the face of what they consider to be a bigger threat.

"In recent years we have seen a deterioration of the situation in the east, we have seen that Russia has massed troops in the west" of its territory, the source added.

Vice chancellor Sigmar Gabriel, leader of the Social Democrats who may challenge Merkel in a general election next year, criticised NATO's tough stance on Russia.

"We need to ask ourselves whether the world will really be better if the two sides conduct military exercises at the border, add military equipment and threaten each other," he told the daily Passauer Neue Presse.