Chancellor Angela Merkel on Thursday asked pardon of the families of 10 people, mostly foreigners, believed killed by a neo-Nazi gang.

Merkel described the seven-year murder spree an attack on Germany and a "disgrace" at a tribute to the victims held in Berlin's central concert hall.

She was speaking after the discovery last year of a neo-Nazi cell thought to be behind the killings of eight men of Turkish origin, one Greek national and a policewoman, between 2000 and 2007.

"Some relatives were themselves for years wrongly under suspicion (over the murders). That is particularly tormenting. For that I ask you for forgiveness," Merkel, dressed in black, told around 1,200 guests.

The memorial began with students carrying 12 candles to the front of the hall to music by Johann Sebastian Bach. The candles were for each of those killed, plus one for other victims of extremist violence and one for hope for the future.

A minutes' silence was due to be held at noon as part of a national day of commemoration for the victims.

Germany was left reeling by the discovery in November of the small far-right group calling itself the National Socialist Underground, which only came to light when two members were found dead in an apparent suicide pact.

A third member, a woman identified as Beate Zschaepe, turned herself in but has refused to speak to police.

The extremist cell is also believed to have mounted two bomb attacks in the western city of Cologne in 2001 and 2004, which wounded a total of 23 people, as well as a series of armed bank hold-ups.

Authorities have faced intense pressure to explain how the group was able to operate with impunity for years and why they did not zero in on the far-right scene at an earlier stage.