German chancellor Angela Merkel's options for forming a new government are narrowing after talks with the Greens ended with both sides unable to agree on how they might form a coalition.

Mrs Merkel's conservative bloc now meets with its other centre-left rivals, the Social Democrats, for coalition talks tomorrow.

Mrs Merkel's bloc won 41.5% of the vote in the September 22 elections but fell five seats short of a majority.

A so-called grand coalition with the Social Democrats, who won 25.7% of the vote, seems her most likely option.

But a deal with the Greens, who won 8.4%, would also give Mrs Merkel enough seats for a majority government.

That possibility remains open, with both sides saying after the talks ended today that their differences could be resolved.

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