He said the U.S. and Chinese rejection of the call by the Group of Four (G4) - Germany, Japan, India and Brazil - for permanent seats was to be regretted. Their objections were "unjustified", he said.
After last month's collective decision by African states, which have demanded more representation for their continent, "more time" might be needed to reach an agreement, the chancellor said as he left a meeting of senior members of his Social Democrat Party (SPD).
The German campaign for greater influence in the Security Council has also lost steam at home in recent weeks, with centre-right parties in Germany saying they do not see it as a priority.
The chancellor said Germany was entitled to a seat because it was the third-largest contributor of funding to the world body and was "unhesitatingly" providing forces for U.N. peace missions, reports Expactica.
According to Reuters, U.N. Secretary General Kofi Annan has urged nations to wrap up the often bad-tempered debate on Security Council reform before a U.N. summit in September.
The decision by African Union leaders not to back the G4 proposal means that Germany and the three others are unlikely to get the necessary two-thirds of votes in the 191-member U.N. General Assembly, the first stage in enlarging the council.
Moreover China and the United States, as permanent members of the Council, will ultimately have veto power over any expansion in the last step of the process.
Since coming to power in 1998, Schroeder and his center-left coalition have revolutionized German post-war foreign policy. Once absent from international peace missions, its troops are now present in areas such as Afghanistan and the Balkans.
In a rare instance of a German leader defying Washington, Schroeder opposed the U.S.-led war on Iraq, a move which led to a deterioration of U.S.-German relations.
Schroeder launched an angry attack on Germany's opposition conservatives for not backing his campaign to win a permanent Council seat. Their chancellor candidate, Angela Merkel, has backed the U.S. line that a broader U.N. reform is needed.