Merkel said she was appalled by Tuesday evening's incident, in which three explosions went off as the Borussia Dortmund bus made its way to a match. Spanish defender Marc Bartra suffered injuries to his arm and wrist and is in hospital.
The attack forced a 24-hour postponement of the team's high-profile clash with AS Monaco, which the visitors won 3-2, and police on Wednesday re-opened an exit from the Dortmund stadium after specialists examined suspicious objects found there.
Officials said security had been stepped up for the rescheduled match and for a second Champions League quarter-final between Bayern Munich and Real Madrid.
Ralf Jaeger, interior minister in the state of North Rhine-Westphalia which includes Dortmund, said the investigation was looking "in all directions", and it was unclear if one or several attackers were involved.
A spokeswoman for the Federal Prosecutor's Office, which handles probes into suspected terrorism, said the explosive devices had contained strips of metal.
Spokeswoman Frauke Koehler said investigators had found three letters near the scene, all with the same content suggesting a possible Islamist motive.
She said the letters referred to the use of Tornado reconnaissance planes in Syria, which Germany has deployed as part of the military campaign against Islamic State, and also called for the closure of the US military base at Ramstein in western Germany.
Investigators had identified two suspects from the "Islamist scene", searched their apartments and detained one man, she said.
DEFENDER INJURED
The blasts smashed windows on the bus carrying the players to the stadium. Bartra was operated on for a broken bone in his right wrist and shrapnel in his arm, a team spokesman said.
"We all agree that we are dealing with a despicable act," Merkel said at a business event in the western town of Allendorf.
"We were all appalled yesterday when we heard about the attack on the bus with the players of BVB in Dortmund," she added, praising Dortmund fans for offering accommodation to AS Monaco fans after the postponement.
Bartra (26) joined Dortmund for €8 million last year from Barcelona, after coming through the Catalan club's youth system. He has made 12 appearances for the Spanish national team.
European soccer's governing body, UEFA, said there had been no specific intelligence regarding any threat to any of Wednesday's Champions League fixtures, which also include a match in Spain between Atletico Madrid and England's Leicester City.
UEFA "is reviewing the security arrangements for tonight’s matches and security procedures will be enhanced accordingly wherever needed," it said, asking supporters to allow extra time for the possibility of enhanced checks.
Police in Munich said they were deploying an additional 80 officers and strengthening security around hotels and key routes for the match there.
The blasts revived memories of Islamist militant attacks in Paris in November 2015 whose targets included a stadium where France were playing Germany in a soccer friendly.
Security is among the issues at the heart of Germany's parliamentary election on September 24, a tight battle in which Merkel is running for a fourth term. In December, a Tunisian man killed 12 people when he ploughed a truck through a Berlin Christmas market.
