Taken by one of the victims, the video showed a young man attacking him while yelling "Yahudi", or "Jew" in Arabic.
Merkel called the attack in the city's trendy Prenzlauer Berg neighborhood "a very awful incident" and vowed the government would respond "with full force and resolve" against growing anti-Semitism in Germany.
Justice Minister Katarina Barley and Foreign Minister Heiko Maas, both from the SPD, sharply condemned the incident, with Barley saying the incident was "a shame for our country", and Maas stating, "We have a responsibility to protect ourselves from attacks on Jewish life".
Two men wearing Jewish kippah caps are attacked by an Arab-speaking youth in Berlin.
Israeli broadcaster Kan published an interview with the 21-year-old, who was slightly injured by the belt, and identified him as Israeli Adam Armoush. Three people came from over there ... and started cursing us from over there.
'When they kept cursing us, my friend asked them to stop cursing, and that got them angry. "I immediately knew that it was important to film because I didn't feel that it was possible to contain him until the police arrive".
According to the Judisches Forum fur Demokratie und gegen Antisemitismus (JFDA), which monitors anti-Semitism in Germany, local police have opened an investigation into the attack.
"I was saying it's really safe and I wanted to prove it, but it ended like that", he said.
He told Spiegel that it's mostly young people who are the victims of such attacks, noting that "at the schoolyards in Berlin where I was traveling, "Jude" was only used as a dirty word".
"This is part of series", Josef Schuster, the president of the Central Council of Jews in Germany, told Deutsche Welle.
Armoush didn't respond to a request for comment from The Associated Press. "Anti-Semitism doesn't belong to the Berlin we want to live in".
Earlier, revelations that a second-grade schoolgirl was bullied at a Berlin primary education institution by older Muslim pupils because she was Jewish provoked widespread condemnation in German media and society.
Anti-Semitic incidents have been on the rise across Germany. "One of them ran at me".
In a separate incident, German aid group GIZ said Wednesday it has taken action against several employees accused of posting anti-Semitic material on social media.
Merkel created a new position of commissioner to fight anti-Semitism under her new coalition government sworn in last month.