White House spokesman Jay Carney confirmed that the phone call took place, and said that Obama assured Merkel that the U.S. is "not monitoring" her communications.
Full readout from the White House:
Today, President Obama and Chancellor Merkel spoke by telephone regarding allegations that the U.S. National Security Agency intercepted the communications of the German Chancellor. The President assured the Chancellor that the United States is not monitoring and will not monitor the communications of Chancellor Merkel.
The United States greatly values our close cooperation with Germany on a broad range of shared security challenges. As the President has said, the United States is reviewing the way that we gather intelligence to ensure that we properly balance the security concerns of our citizens and allies with the privacy concerns that all people share.
Both leaders agreed to intensify further the cooperation between our intelligence services with the goal of protecting the security of both countries and of our partners, as well as protecting the privacy of our citizens.