A growing row over US spying is set to dominate an EU summit in Brussels starting Thursday, after revelations German Chancellor Angela Merkel's calls may have been monitored.
European Union leaders will also tackle a complex immigration crisis which was thrust into the spotlight after hundreds of migrants died in two shipwrecks off Italy and Malta this month trying to reach the continent.
The meeting is officially themed around boosting employment and the digital economy. However the two-day talks are likely to be overshadowed by mounting anger over US spying on Europe.
Merkel demanded answers from President Barack Obama in a phonecall on Wednesday night after Germany received information that US intelligence may be spying on her mobile phone.
The conversation came after Obama had another embarrassing call with a foreign leader when he spoke to French President Francois Hollande on Monday over reports Washington had monitored millions of phone calls inside France.
An angry Merkel demanded "an immediate and comprehensive explanation" from Washington over what she warned was a serious breach of trust, her spokesman said in a statement.
Germany's conservative daily Die Welt called the alleged snooping "a punch in the face of German security agencies" while a Sueddeutsche Zeitung headline labelled it "the worst imaginable insult."
White House spokesman Jay Carney said Obama assured Merkel the US was "not monitoring and will not monitor" her communications.
The revelations will add to pressure on Brussels for new EU-wide data privacy protections, which Paris has said will be raised by Hollande.
With Germany and France fuming over the breach of their privacy, Europe's battered southern economies are determined to focus on the tide of migrants from North Africa and the Middle East which they say they are being left to cope with alone.
'Far too many people are dying'
Two shipwrecks that saw over 400 refugees drown this month near the Italian island of Lampedusa as they tried to reach Europe have triggered a barrage of calls for action to prevent the Mediterranean Sea from turning into what French Foreign Minister Laurent Fabius labelled an "open-air cemetery".
Italian Prime Minister Enrico Letta has already urged European leaders to bolster the EU's Frontex border agency and bring forward Eurosur, a planned satellite-and-drone surveillance programme to detect migrant ships in trouble.
Frontex reportedly saved 16,000 lives in the Mediterranean in the last two years, but has seen its budget fall from 118 million euros ($162 million) in 2011 to 85 million euros this year due to crisis-era belt-tightening.
Malta's Prime Minister Joseph Muscat and his Spanish counterpart Mariano Rajoy have added their voices to Letta's demand for the European Union to share the burden.
Italy says migrant numbers increased fourfold this year to 30,000, while Spain says twice as many Africans -- 3,000 -- have tried to slip through its barbed-wire territory of Melilla in north Morocco this year.
Analysts say it is high time for the EU to define a common policy that will address how to respond jointly to refugees from conflict and migrants in search of a better life.
"Far too many people are dying every year at the EU's external borders," said Yves Pascouau of the European Policy Centre think-tank.
With the unprecedented refugee flight from Syria's civil war, "EU leaders cannot escape answering the remaining questions any longer," he added.
Officials sent to Rome are to feed back initial ideas in time for the summit.
But despite pressure for concrete action, diplomats say they expect little more than agreement to examine limited "short-term" moves, and hard actions were absent from draft conclusions.
One EU ambassador said immigration was a hot political issue ahead of European Parliament elections due in May, especially for far-right groups.
"The likes of the UK Independence Party and Marine Le Pen in France are making this a big issue for the EU," said the ambassador, who did not want to be named.