German Chancellor Angela Merkel on Monday criticized protest rallies of the anti-Islamization movement, PEGIDA.

"Of course there's freedom to demonstrate in Germany," Merkel said Monday in Berlin. "But it's not place for agitation and defamation against people who come to us from other countries."

The chancellor warned everyone should watch out that they aren't being exploited by initiators of such movements as PEGIDA, adding the German government is taking steps to solve problems caused by the increasing number of asylum seekers.

PEGIDA stands for "Patriotic Europeans against the Islamization of the Occident." Members of the movement have been protesting against "Islamization of western countries" and demanding stronger laws for those seeking asylum. Their anti-Islamization march has grown in numbers of participants since October.

PEGIDA organizers have decided to hold a rally in Dresden on Monday evening, which is expected to be attended by around 10,000 people, according to media reports. At the same time, counter-demonstrations calling for more tolerance are also planned against the PEGIDA rally in the eastern German city.

In an interview with German newspaper Sueddeutsche Zeitung, German Justice Minister Heiko Maas said Sunday that the PEGIDA protest rallies were "a shame for Germany," and the country was experiencing a "new level of escalation of agitation against immigrants and refugees." He asked for a civil society and political parties to come together against the anti-Islamization movement.