The Obama administration faced a breakdown in confidence from key foreign allies over secret surveillance programmes that reportedly installed covert listening devices in EU offices.
They threatened investigations and sanctions against the US, in the latest backlash in the global debate over the reach of US surveillance that aims to prevent terror attacks.
US intelligence officials said they will discuss with EU officials the new allegations, reported in Sunday's editions of the German news weekly Der Spiegel.
But the former head of the CIA and National Security Agency (NSA) urged the White House to make the spy programmes more transparent to calm public fears about the American government's snooping.
The two programmes, both run by the NSA, pick up millions of telephone and internet records that are routed through American networks each day. They have raised concerns about whether they violate public privacy rights at home and abroad.
Several European officials - including in Germany, Italy, France, Luxembourg and the EU government itself - said the revelations could scuttle negotiations on a transatlantic trade treaty that seeks to create jobs and boost commerce by billions annually in what would be the world's largest free trade area.
"Partners do not spy on each other," said EU justice commissioner Viviane Reding. "We cannot negotiate over a big transatlantic market if there is the slightest doubt that our partners are carrying out spying activities on the offices of our negotiators. The American authorities should eliminate any such doubt swiftly." European Parliament president Martin Schulz said he was "deeply worried and shocked about the allegations of US authorities spying on EU offices".
According to Der Spiegel, the NSA planted bugs in the EU's diplomatic offices in Washington and infiltrated the building's computer network. Similar measures were taken at the EU's mission to the United Nations in New York, the magazine said. It also reported the NSA used secure facilities at Nato headquarters in Brussels to dial into telephone maintenance systems that would have allowed it to intercept senior officials' calls and internet traffic at a key EU office nearby.
The Spiegel report cited classified US documents taken by NSA leaker and former contractor Edward Snowden that the magazine said it had partly seen.
In Washington, the national intelligence director's office said US officials planned to respond to the concerns with their EU counterparts and through diplomatic channels with specific nations. However, "as a matter of policy, we have made clear that the United States gathers foreign intelligence of the type gathered by all nations", its statement concluded.