"When we call them fascists, Nazis they in Europe get uncomfortable".
Several hundred police officers were deployed at what they described as peaceful rally.
Erdogan has dubbed Merkel and the Dutch government "fascists" and accused them of engaging in "Nazi practices" after both Germany and the Netherlands prevented campaign events for expatriate voters ahead of Turkey's referendum.
"You are right now employing Nazi measures".
The dispute flared this month. "To whom? To my Turkish brothers and sisters in Germany", the Turkish leader also said as quoted by the AP.
Some local German authorities have chose to block appearances by Turkish ministers, but Merkel's federal government - unlike its Dutch counterpart - so far has made no such decisions.
"It is unacceptable to see the symbols and slogans of the [outlawed Kurdistan Workers' Party] PKK [at a rally in Frankfurt] while Turkish ministers and politicians are barred from meeting with their fellow citizens", Kalin told in an interview to CNN Turk. Ankara also summoned the German ambassador at that time.More news: Nia Jax added to Raw women's title match at WrestleMania 33
Presidential spokesman Ibrahim Kalin said Europe was seeking to "whitewash" Gulen's group, while Defence Minister Fikri Isik said the comments raised questions about whether Berlin itself was involved in the putsch.
In early March, Turkey's Justice Minister Bekir Bozdag pulled out of a scheduled visit to Germany, after a small town in German south-western region of Baden-Wurttemberg denied him the chance to address his countrymen.
Relations between Ankara and Berlin continue to worsen. "This is impertinence. The fact that the head of state of a friendly country insults the country's governor in this form is impertinence", Schulz told ARD on March 20, adding that it should be told to Erdoğan, as a head of state of a North Atlantic Treaty Organisation member and an European Union candidate for accession, that the practices of worldwide diplomacy can not be violated.
It was Erdogan's clearest warning yet that he could reverse the 2004 abolition of capital punishment, a precondition for joining the EU.
Germany's Foreign Minister Sigmar Gabriel responded to Erdogan's comments by calling them "shocking".
He added that the death penalty was a "red line", however: "If the death penalty is reintroduced in Turkey, that would lead to the end of negotiations". But Erdogan said he would sign it immediately.
He had said on Friday that Turkish families living in Europe should have "not just three but five children" each, in order to "stake a claim".