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German Chancellor Angela Merkel, speaks during a meeting at the lower house of parliament Bundestag on 2017 budget in Berlin, Germany, September 7, 2016. REUTERS/Stefanie Loos

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By Erik Kirschbaum

BERLIN (Reuters) - The leader of Germany's conservative Christian Social Union (CSU), a critic of Chancellor Angela Merkel's welcoming refugee policies, said on Saturday the two sister parties face election defeats if they remain at odds over migration.

Horst Seehofer, who is also Bavaria's state premier, said he hoped Merkel and her Christian Democrats (CDU) would agree to a cap of 200,000 refugees a year following the arrival of about one million in 2015.

"If we narrow the gap on our positions, we have good chances (in upcoming elections), but if we don't, it will be a major liability for both the CDU and the CSU," Seehofer told reporters at the end of a two-day CSU meeting during which party leaders unanimously backed his plan to limit refugee numbers.

"We want common ground but not at any price that forces us to sacrifice our basic political views," he added. "We can't go on debating this forever. We've got to make decisions."

Merkel has refused to introduce migrant caps demanded by the CSU even though her approval ratings have fallen by 22 points in the last year to 45 percent while her CDU/CSU bloc lost eight points to 33 percent, according to an ARD TV opinion poll published last week.

She acknowledged her liberal migrant policy contributed to a humiliating state election rout last Sunday, where her CDU finished third with just 19 percent and for a first time behind the surging anti-immigrant Alternative for Germany (AfD) party.

Merkel, Seehofer and Vice Chancellor Sigmar Gabriel of the centre-left Social Democrats (SPD), a junior partner in Merkel's coalition, will meet behind closed doors in Berlin on Sunday to discuss the issues.

"We'll see what the chancellor talks about tomorrow," Seehofer said. He also dismissed suggestions from the CDU that he should stop criticising Merkel's position.

"Since when has it become necessary to tone down clearly defined political formulations?" he said.

The CSU conclave in the Bavarian town of Schwarzenfeld also approved a five-page CSU paper, highlighted by the demand to draft legislation - called "Einwanderungsbegrenzungsgesetz" - to cap the number of refugees at 200,000 per year even though there is no limit in the constitution.

Contradicting CDU positions, the CSU paper also calls for the abolition of dual citizenship and a ban on the burqa, the enveloping outer garment worn by some Muslim women, and the niqab, a facial veil which reveals only the eyes.

(Additonal reporting by Jens Hack in Schwarzenfeld; Editing by Helen Popper)

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