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.
A television channel later aired similar images which it said were taken in Afghanistan in March 2004, a year later than those published in Bild.
The defence ministry says it is 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 Mr 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.
Soldiers could be targeted
German defence ministry spokesman Thomas Raabe said Germany feared its soldiers and nationals could be targeted by insurgents because of the images.
Mr Raabe said the army was sending its chief training officer to Afghanistan to establish what problems could have prompted the soldiers' behaviour.
One of the suspects told Bild, 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 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.
Germany is the second biggest contributor of peacekeepers to Afghanistan and holds the command of ISAF in the relatively peaceful north of the country.