An EU summit is due to begin in Brussels with fresh allegations of US spying threatening to overshadow talks.
It comes a day after German Chancellor Angela Merkel called President Barack Obama over claims that the US had monitored her mobile phone.
France’s President Francois Hollande is pressing for the issue to be put on the agenda following reports that millions of French calls had been monitored.
EU leaders will also discuss Europe’s economic recovery and immigration
BBC Europe Editor Gavin Hewitt says some leaders are likely to want to use the summit to demand further clarification from Washington over the activities of its National Security Agency (NSA) in Europe.
The US is being called to account by its allies over allegations of spying based on material said to originate from fugitive American leaker Edward Snowden.
Mrs Merkel says she wants US officials to clarify the extent of their surveillance in Germany.
Her spokesman said the German leader “views such practices… as completely unacceptable”.
The White House said President Obama had told Mrs Merkel that the US was not monitoring her calls and would not in the future.
However, it left open the question of whether calls had been listened to in the past.
Meanwhile, a major focus of the summit will be to boost the digital economy – seen as vital for growth – while UK Prime Minister David Cameron will want red tape cut for businesses.
Immigration and the recent disasters involving migrants crossing the Mediterranean will also be discussed.
With markets becalmed, Spain coming out of recession and Ireland soon to exit its bailout programme, there are signs of progress for Europe’s leaders to celebrate, says our correspondent.
But they recognise that the recovery is fragile and solid growth is needed.
One of the key initiatives of the European Commission is its Digital Agenda for Europe, which it says “aims to reboot Europe’s economy and help Europe’s citizens and businesses to get the most out of digital technologies”.
Council officials say investment in the digital economy is vital to boost growth. They want to address market fragmentation and a perceived shortage in IT skills.
They may also discuss telecoms reform, data protection and a cap on credit card payments.
Mr Cameron is likely to use the economic discussion to raise what Britain sees as a proliferation of red tape.
He said last week: “All too often EU rules are a handicap for firms,” and that small business owners “are forced to spend too much time complying with pointless, burdensome and costly regulations”.
The European Commission – which makes the rules – has recognised that it may have gone too far in some places.
President Jose Manuel Barroso says he wants the EU to be “big on big things and smaller on smaller things”.
He says the Commission has cut more than 5,000 legal acts in the past five years and wants to do more.
On Friday the leaders will discuss relations with central European countries, ahead of a November summit at which new agreements will be signed.
The deal with Ukraine is still up in the air, with the EU protesting at the detention of opposition leader Yulia Tymoshenko.
Migration will also be discussed, following the loss of hundreds of lives among migrants trying to reach Europe from Africa and the Middle East.
The commission has called on EU countries to offer “additional and urgent contributions” to prevent further tragedies at sea.
It wants greater resources to survey and patrol sea routes, but also a more co-ordinated approach to dealing with migrants.
Countries on the Mediterranean coast deal with sudden and unmanageable mass arrivals, but the countries which approve most asylum requests are Germany, France and Sweden.
The commission wants a more even resettlement of refugees.
EU sources say the leaders are likely to promise improved co-operation, but not more money or resources. They say they first want a new surveillance effort, Eurosur, to come into force, to see what effect it has.