Merkel will now face questions three times a year, though some opposition lawmakers say the format is too inflexible.
"It is apparent that we have a serious problem with multilateral agreements here, and so there will be contentious discussions", Merkel said.
In addition to the disruptive effects of the rift in NATO and Trump's exit from the Paris global climate treaty, Merkel pointed to the fresh conflict over trade and the US leader's withdrawal from the Iran nuclear accord last month. "Therefore, the exclusion of Russian Federation from the "Big eight" is the right decision", - said the Chancellor.
She said Russia's readmission to such a format is not now feasible.
While it lacked the raucous free-for-all quality of the familiar British version of the tradition, Wednesday's session marked the first time the German chancellor has faced members of parliament for a direct interrogation.
There is "no sense in papering over divisions" at June summit, German chancellor tells parliament. "The U.S. move "[undermines] open trade and confidence in the global economy", the six nations of the group said in a statement.
She said Germany will work at least to preserve what was agreed on at last year's G-7 and Group of 20 summits on trade and climate.
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The parties should talk to each other, Merkel said.
In a weekend newspaper interview, Merkel offered her most detailed response to French President Emmanuel Macron's ideas for reforming Europe, seeking to avert a damaging rift with Paris at a time of anxiety over Italy and growing transatlantic tensions.
U.S. President Donald Trump announced in May that he has chose to withdraw from the Iran nuclear deal, saying it did not address Iran's ballistic missile program, its nuclear activities beyond 2025 or its role in conflicts in Yemen and Syria.
AfD, however, sought to assail Merkel over the influx of more than a million migrants to Germany in 2015 and 2016.
Merkel calmly replied that "in an exceptional humanitarian situation, Germany behaved very responsibly".
After the 60-minute session, time was called. But "I'll come back".