Merkel's team huddled with her Bavarian CSU allies led by Horst Seehofer, who has angrily blamed her decision to allow in over one million asylum seekers since 2015 for the rise of the far-right Alternative for Germany (AfD) party.
After 10 hours of closed-door talks, Merkel's CDU and the CSU agreed they would aim to cap refugees coming to Europe's top economy at 200,000 a year, according to a draft paper - a formulation close to a long-time Seehofer demand that Merkel had repeatedly rejected.
The goal of the meeting was to settle bitter squabbles so the estranged conservative sister parties can again present a united front in upcoming coalition talks with two smaller parties - the pro-business Free Democrats (FDP) and the left-leaning and ecologist Greens.
The CSU's beleaguered Seehofer - who after a vote drubbing faces internal challengers, and state elections next year - had vowed to close his party's exposed "right flank" and win back AfD voters, crucially by taking a harder line on refugees and immigration.
