"We believe in the UN-led process of diplomatic resolution…We do not think that there can be a military solution to this conflict," said Merkel during a visit to the Saudi port city of Jeddah on Sunday.
She added that measures must be taken to reverse the "extremely bad humanitarian situation" in Yemen.
This as an agreement was signed for Saudi troops to receive training from German soldiers at unified armed forces facilities.
A separate deal was also made for German federal police to instruct and train Saudi border police and other security forces.
During the trip, Merkel met with Saudi Arabia's King Salman, Crown Prince Mohammed bin Nayef, and Deputy Crown Prince Mohammed bin Salman.
Saudi Arabia has been incessantly pounding Yemen since March 2015 in an attempt to bring back to power the resigned president, Abd Rabbuh Mansur Hadi, who is a staunch ally of Riyadh, and to undermine the Houthi Ansarullah movement. The Riyadh regime has, however, failed to reach its goals despite suffering great expense.