"I do not believe in an Olympics boycott," the daily Bild newspaper quoted her as saying before leaving for a three-day trip to Israel, in an advance copy of its Monday issue.
The right-leaning tabloid said the conservative leader believed a boycott could backfire and exacerbate the situation in China.
Meanwhile German Foreign Minister Frank-Walter Steinmeier said he had spoken to his Chinese counterpart Yang Jiechi for a nearly an hour by telephone on Sunday and expressed Berlin's "great concern" about the violence in Tibet.
A statement from his ministry said Steinmeier had called for Beijing to do everything in its power "to avoid a further escalation of the situation and bring about a peaceful end to the conflict."
He also called on Yang to ensure "the greatest possible transparency in the events in Tibet" and urged him to do all he could to protect Germans currently in the country.
Tibet's spiritual leader the Dalai Lama on Sunday condemned what he called China's "rule of terror" and "cultural genocide" in Tibet after reports of heavy casualties among protesters. But he refrained from calling for a boycott of the Beijing Olympics, as many Tibetan exiles have been demanding.
Relations between Berlin and Beijing plunged to freezing point after Merkel hosted the Dalai Lama, whom China considers a dangerous separatist, at her offices in September. The Chinese government axed a series of official meetings over the row and relations have only recently begun to return to normal. Germany is China's biggest trading partner in Europe.
The unrest in Tibet followed three days of protests by hundreds of monks in the Tibetan capital of Lhasa, India and elsewhere around the world marking the anniversary of a failed 1959 uprising against Chinese rule.
The violence has left at least 80 people dead, according to Tibet's government-in-exile, although the official death toll in China's state-run media remained at 10.