The Wall Street Journal is reporting that Obama was unaware that the NSA was spying on world leaders -- until an internal White House review revealed that the operation existed.
The review revealed to the president and this staff that the NSA was spying on 35 world leaders, and since learning about them the White House has "cut off some monitoring programs." That included the one tracking German chancellor Angela Merkel as well as "some other world leaders". However, other spying programs that have apparently been slated for termination are still running.
The news suggests that Obama was unaware of the world leader spying for nearly five years . Officials have explained that the president was briefed on -- and approved -- broader spying operations, but that decisions on specific intelligence targets were made the agency level. "These decisions are made at NSA," an official explained to the newspaper. "The president doesn't sign off on this stuff." Perhaps unsurprisingly, that protocol is now under review. [WSJ]
Update: A report by Der Spiegel now suggests that much of the spying in Germany was conducted through a US spying post run out of it's embassy in Berlin.