By Paul Carrel
BERLIN (Reuters) - Allies of German Chancellor Angela Merkel said they would not agree a coalition at any price ahead of crunch talks on Thursday at which she must forge a three-way alliance or else risk seeing her 12-year stint in power come to an end.
Merkel, 63, is trying to form an unlikely alliance between her conservatives, the pro-business Free Democrats (FDP) and the ecologist Greens - a combination untested at national level - to allow her to govern for a fourth term as chancellor.
She wants exploratory talks on forming the coalition to end on Thursday so the would-be allies can move on to formal negotiations. But the parties remain far apart on key issues including immigration, finances and protecting the climate.
"I don't know if we can resolve all the discrepancies, all the disagreements," said Joachim Herrmann, a senior member of the Christian Social Union (CSU), the Bavarian sister party of Merkel's Christian Democratic Union (CDU).
Jens Spahn, a senior CDU member, told the Passauer Neue Presse: "There won't be a coalition at any price."
Negotiators will meet in small teams on Thursday morning before the talks get underway in the early evening for what German media are calling "the night of long knives".
Merkel is a skilled negotiator, renowned at European Union summits for building pressure on her negotiating partners and playing on their fatigue.
She must leverage all these skills to secure the three-way "Jamaica" coalition, so-called because the parties' colors match those of the Caribbean country's flag.
"A failure of Jamaica would be her failure," mass-selling daily Bild wrote.
Merkel's partner in Germany's previous "grand coalition" - the center-left Social Democrats (SPD), the second biggest party in the Bundestag lower house after the conservative bloc - have said they now want to rebuild their forces in opposition after suffering their worst election result since 1933.
Failure to clinch a deal could lead to new polls - a scenario none of the negotiating parties wants for fear the far-right Alternative for Germany (AfD) could make further gains after surging into parliament in the Sept. 24 national election.
"That would be an economic stimulus program for the right-wing populists," Thomas Strobl, another senior CDU official, said of the possibility of new elections.
Thursday's talks are expected to run into the early hours of Friday morning. Even if negotiators agree a coalition deal, it must still pass muster with lower-ranking party officials.
A key test will be a Greens conference on Nov. 25, when the party's rank-and-file will examine any coalition accord. Despite the challenges facing negotiators, some have no appetite to extend the exploratory talks in the event of no deal overnight.
"If, after three weeks of negotiations, we can't say we can go into a stable governing alliance with each other, then three more days aren't going to help," said Annegret Kramp-Karrenbauer, CDU premier in the western state of Saarland.
(Writing by Paul Carrel; Editing by Gareth Jones)