BERLIN (Reuters) - Germany's Social Democrats on Sunday rejected NATO's target of spending 2 percent of economic output on the military, and blasted German Chancellor Angela Merkel and her conservatives for kowtowing to the demands of U.S. President Donald Trump.

With just over a month to go before national elections, SPD leader Martin Schulz and Thomas Oppermann, who heads the SPD in parliament, issued their strongest criticism to date of Merkel, the NATO spending target and Defence Minister Ursula von der Leyen in an essay for the Funke Mediengruppe newspaper chain.

"We say a clear no to the 'two-percent target' of Trump and the CDU/CSU," the two leaders wrote, referring to Merkel's Christian Democrats and their Bavarian sister party.

"It's not only unrealistic, it is simply the wrong goal."

The comments put the SPD on a collision course with U.S. officials, who have began pressing Germany long before Trump's election last November to increase its military spending.

The SPD leaders, whose party is lagging Merkel's Christian Democrats in the polls by 15 percentage points, said Germany would have to nearly double current defense spending to meet the NATO target. That would make it the largest military power in Europe - a goal they said "no one could want" given Germany's Nazi history.

Instead, they said, Germany should focus on building a strong European defense union and ultimately, a European army - a stance that may resonate with a deeply pacifist German public that remains skeptical of military engagements.

"Merkel and the CDU/CSU make themselves small vis-a-vis Donald Trump when they answer his provocations around the two-percent target by saying, 'Okay, fine, we'll put in more money,' as if we didn't have any better ideas what to do," they wrote.

They said increased military spending should be matched by higher outlays for diplomacy, humanitarian aid and crisis prevention.

Foreign Minister Sigmar Gabriel, a former SPD leader, has also questioned the NATO target, but the Schulz-Oppermann essay was far more explicit, driving a further wedge between the parties in Merkel's right-left coalition.

Merkel, who is poised to win reelection on Sept. 24, insists that Germany is committed to reach the two percent target. She has also chided Gabriel pointedly, noting his predecessor signed off on the NATO commitment when it was first made years ago.

Merkel's conservatives have about 38 to 40 percent support in the polls, and hope to form a coalition government with one or more of the smaller parties, after the election.

In June, the SPD also reversed course and rejected plans to lease Israeli drones that can carry weapons to protect German soldiers serving in Afghanistan and Mali, sparking sharp criticism from von der Leyen and the top officer in the German air force.

The essay also criticized von der Leyen's leadership as defense minister since late 2013, citing continued problems with equipment, a lack of planning, and challenges in recruitment.

Reporting by Andrea Shalal; Editing by Mary Milliken

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Germany's SPD rejects NATO 2 percent defense spending target - Reuters