Germany's domestic intelligence service on Friday designated the far-right AfD party as an extremist group, setting off a diplomatic spat with the United States and fueling calls for the party to be banned.

The BfV intelligence agency, which had already designated several local branches of the anti-immigrant Alternative for Germany (AfD) as right-wing extremists, said it moved against the entire party due to its attempts to "undermine the free, democratic" order in Germany.

The classification gives authorities greater powers to monitor the party by lowering the barriers for such steps as intercepting telephone calls and deploying undercover agents.