Outside work or school, contact between people should also be “restricted to those from another fixed household,” according to a proposal by Merkel's office and which would be put to regional leaders of Germany's 16 states later Monday.
Europe's biggest economy began a new round of shutdowns in November, closing restaurants, cultural venues and leisure facilities to curb transmission of Covid-19.
But while new cases are plateauing, the daily numbers are still too high for officials to determine the infection chain and thereby break the transmission.
During talks to take stock of the situation, Merkel will seek to get state premiers to sign up to drastically limiting contacts.
All private parties should be cancelled until Christmas, the document proposes.
Children and youths should pick just one specific friend to meet up with outside school hours.
To ensure that schools are kept open as long as possible, the chancellery has also suggested that classes “without exceptions be broken up into fixed groups, where the size of groups in classrooms are halved compared to normal operations”.
An alternative is to use larger rooms for classes, according to the draft.
The document also urges anyone with signs of a cold, including a cough or runny nose, to self-isolate for five to seven days until they are free of symptoms again.
Germany has fared relatively well in the first wave of the pandemic, but numbers have dramatically shot up in the autumn.
On Monday, it reported 10,824 new cases in the last 24 hours, bringing total infections to date to 801,327. Some 12,547 people have died from the virus.