In an act of defiance, Berliners flocked to the same Christmas market that witnessed the murder of 12 people on Monday, as it reopened for the first time in three days.
Just as Merkel praised the country for not succumbing to fear in the wake of the attack, she insisted that authorities would manage to track down the alleged assailant.
"I am certain we will meet this test we are facing," she said, voicing confidence for a "hopefully quick arrest".
"In the past few days I have been very proud of how calmly most people reacted to the situation."
Prosecutors have issued a Europe-wide wanted notice for 24-year-old Tunisian Anis Amri, offering a €100,000 reward for information leading to his arrest and warning he could be armed and dangerous.
Interior Minister Thomas de Maiziere said the case against Amri was hardening, with his fingerprints found in the cab of the 40-tonne truck, as well as his temporary residence permit.
The articulated lorry rammed through the crowd late Monday, killing 11. The twelfth victim, the hijacked truck's Polish driver, was found shot in the cab.
Berliners returned Thursday to the market at the central Breitscheid square, leaving a sea of flowers and candles for the victims and signs reading "Love Not Hate".
Organisers dimmed garish lights and turned down the party music but began serving cakes and mulled wine. Amid a low-key police presence, vendors embraced each other, some weeping as they opened their stands.
'They did nothing'
The attack, Germany's deadliest in recent years, has been claimed by Isis.
Among the confirmed dead were six Germans, 60-year-old Israeli Dalia Elyakim, and a young Italian woman called Fabrizia Di Lorenzo. A total of 48 people were injured.
But as the manhunt intensified, questions surfaced about how the suspect had been able to slip through the net, avoiding arrest and deportation despite being on the radar of several security agencies.
"The authorities had him in their crosshairs and he still managed to vanish," said Der Spiegel's news website.
The top-selling daily Bild's frontpage headline screamed "Deportation Failure!" while local tabloid B.Z. charged "They knew him. They did nothing", next to a photo of the dark-haired Amri.
Conservative lawmaker Stephan Mayer, a critic of Merkel's liberal stance on refugees, told public radio that the case "held up a magnifying glass" to the failings of her migration policy.
But Armin Laschet, a deputy leader of Merkel's Christian Democrats, placed the blame with regional security authorities, calling their inability to keep tabs on Amri "shocking".
Merkel herself said Germany had "known for a long time that we are in the crosshairs of Islamic terrorism. And yet, when it happens ... it is a totally different situation."
She hailed the "highly professional work" of federal and state police as well as the "smooth cooperation" with international partner organisations.
But in a revelation likely to stoke public anger, officials said they had already been investigating Amri, suspecting he was planning an attack.
The interior minister of North Rhine-Westphalia state, Ralf Jäger, said counter-terrorism officials had exchanged information about Amri, most recently in November, and a probe had been launched suspecting he was preparing "a serious act of violence against the state".
Berlin prosecutors said separately that Amri had been suspected of planning a burglary to raise cash to buy automatic weapons, "possibly to carry out an attack".
But after keeping watch on him from March until September this year they failed to find evidence of the plot, learning only that Amri was a small-time drug dealer, and the surveillance was stopped.
Since the attack, police have searched a refugee centre in Emmerich, western Germany, where Amri stayed a few months ago, as well as two apartments in the capital.
The New York Times reported, citing US officials, that Amri had done online research on how to make explosive devices and had communicated with Isis at least once, via Telegram Messenger. He was also on a US no-fly list.
Der Spiegel reported that German government wiretapping against "hate preachers" had indicated that Amri had offered to carry out a suicide operation but that his statements were too vague for prosecutors to use.
Amri's family expressed disbelief on hearing he was wanted.
"If my brother is behind the attack, I say to him 'You dishonour us'," Abdelkader Amri told AFP in a poor village in central Tunisia.
Amri left his home country after the 2011 revolution and lived in Italy, where he served four years in prison for setting fire to a school, local media reported.
He arrived in Germany in July 2015 but his application for asylum was rejected this June. His deportation, however, got caught up in red tape with Tunisia, which long denied he was a citizen.
Germany had until now been spared the devastating jihadist carnage that has struck neighbouring France and Belgium.
But it has suffered a spate of smaller attacks, including two assaults in July that left 20 people injured. Both were committed by asylum seekers and claimed by Isis.
The Berlin carnage evoked memories of the July 14 truck assault in the French Riviera city of Nice, where 86 people were killed by a Tunisian Isis sympathiser.