Defence Minister Franz Josef Jung told reporters more suspensions would follow over incriminating photos taken in 2003 and 2004 of German peacekeepers serving in the NATO-led International Security Assistance Force (ISAF).
The scandal broke on Wednesday when Bild newspaper ran pictures of a Bundeswehr soldier mounting a skull on an ISAF patrol vehicle, and another of him holding it next to his penis.
On Thursday, a television channel aired similar images which it said were taken in Afghanistan in March 2004, a year later than those published in Bild.
The defence ministry on Friday said it was braced for "a third wave of photographs" after Bild said it had received "dozens more" macabre pictures and would publish some on Saturday. In one of the pictures a soldier is reportedly shown pointing his gun at a skull.
The affair has so far embroiled two German army units -- a mountain infantry battalion normally based in the Bavarian Alps and an armoured division from Bad Seegeberg in northern Germany.
Prosecutors said they were investigating the two suspended soldiers and seven others on charges of disturbing the peace of the dead, a crime which carries a prison sentence of up to three years in Germany.
According to Jung, most of the suspects have completed their tour of duty and left the army.
Chancellor Angela Merkel has described the affair as "shocking and disgusting" and the Afghan government also expressed dismay on Friday.
Afghan foreign ministry spokesman Sultan Ahmad Baheen said the men's conduct "goes against Islamic values and Afghan traditions" and has "deeply saddened" the authorities in Kabul.
German defence ministry spokesman Thomas Raabe said Germany feared its soldiers and nationals could be targeted by insurgents because of the images.
"We realise there is a danger and we have spoken to the authorities in Afghanistan, and also to the Muslim community there and here (in Germany)." Raabe said the army was sending its chief training officer to Afghanistan to establish what problems could have prompted the soldiers' behaviour.
The Bundeswehr hoped to prove that such misconduct was not common among the 2,800 German soldiers currently serving there, he added.
"We do not think this was very widely known. And we still think and we hope we will soon be able to prove that the majority of our nearly 3,000 men in Afghanistan are properly behaved."
But one of the suspects told Bild in an interview published on Friday that it was common knowledge in the German contingent that soldiers were desecrating the dead.
"It was well known among the lower-ranking soldiers. They found it quite funny."
The unnamed soldier admitted that he was among troops who had clowned for the camera with a skull on a road outside Kabul and claimed he had acted under pressure from his peers. "It was a stupid thing to do. I would rather not have been there," he said.
"If you did not take part, it was like: 'You wimp, what is the matter with you?'"
He said they had found the skull in a gravel pit.
"It was a big gravel pit, the kind from which Afghans take soil to make bricks," he told the paper.
"The devil only knows how it got there. Perhaps dead bodies were dumped in the pit during the war."
Germany is the second biggest contributor of peacekeepers to Afghanistan and holds the command of ISAF in the relatively peaceful north of the country.
The cabinet this week decided to extend a combat mandate which could see it send elite forces to southern Afghanistan where a Taliban insurgency is raging.
It also approved a defence policy paper which paves the way for Germany to play a far bigger role in international peacekeeping missions.

Copyright AFP (Agence France-Presse), 2006