German Chancellor Angela Merkel defended her government's taboo-breaking decision to send arms to Kurds fighting Islamic State militants in Iraq, telling parliament on Monday that the group posed a major security threat to Germany and Europe.

A day after Berlin announced it would send anti-tank rockets, assault rifles and hand grenades to the Kurds, Merkel said Germany had a responsibility to intervene in the conflict to prevent a humanitarian catastrophe in Iraq, citing evidence of ethnic cleansing by Islamic State fighters.

"The far-reaching destabilization of an entire region affects Germany and Europe," Merkel said in a speech to the Bundestag lower house, noting that the Islamist group controlled an area in Iraq and Syria that was half the size of Germany.