Reports that the US National Security Agency tapped German Chancellor Angela Merkel's cellphone and conducted widespread electronic snooping in nations such as France, Italy, Spain and elsewhere have sparked anger among American allies.
"It's not very pleasant when you are spied on so the leaders are angry. I understand them," Medvedev told in an interview on Thursday.
Medvedev suggested such spying was not unusual, but he added that "it is assumed that it is not done in such an absolutely cynical way".
"Can the situation be calmed? I think it's possible. But to be honest, no assurances will help here. What can you say in this situation? Sorry, we won't do it anymore or we will not try to listen in on you? Nobody will believe it," he said.
The snooping scandal is a result of disclosures of US secrets made to media organizations by Edward Snowden, a former National Security Agency contractor who fled the United States and has been living in asylum in Russia since August.
Spy scandals strained relations between Russia and the United States during Medvedev's 2008-2012 presidency and have continued to do so since Vladimir Putin returned to the Kremlin last year.
Former KGB spy Putin said Russia would shelter Snowden only if he stopped harming the United States, but the president ignored US pleas to send the American home to face espionage charges.
The decision to grant Snowden asylum seemed to underscore Putin's accusations that the United States preaches to the world about rights and freedoms it does not uphold at home.
A German lawmaker said he met Snowden in Moscow on Thursday and that the former NSA contractor was willing to come to assist investigations into alleged US surveillance of Merkel.