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German Chancellor Angela Merkel smiles next Bavarian state premier and leader of the Christian Social Union (CSU) Horst Seehofer (R) during a news conference at the Chancellery in Berlin, Germany, April 14, 2016. REUTERS/Fabrizio Bensch

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By Michelle Martin

BERLIN (Reuters) - Chancellor Angela Merkel's Chief of Staff said on Sunday he was confident Germany's sister conservative parties, whose unity is threatened by a row over migrant policy just a year before a federal election, would soon sort out their differences.

Horst Seehofer, leader of the Christian Social Union (CSU) - the Bavarian sister party to Merkel's Christian Democrats (CDU) - wants to cap the number of refugees at 200,000 per year after around one million arrived in 2015. But Merkel opposes such a measure despite her declining popularity.

Merkel and Seehofer had a constructive discussion about refugee policy on Sunday but their meeting ended "without rapprochement on the cap", a coalition source said.

They later also met behind closed doors with Vice Chancellor Sigmar Gabriel, leader of the Social Democrats (SPD) - the junior partner in Merkel's coalition - but a coalition source said the refugee issue was not discussed then.

Peter Altmaier, who is close to Merkel and is responsible for overseeing the government's handling of refugee issues, told broadcaster ARD he was "very optimistic" the CDU and CSU would be able to put their differences aside in the coming weeks.

"The chances of that are good because since April, since the EU-Turkey deal came into force, the number of refugees has gone down so drastically that hardly anyone is coming to Germany any more and that means this dispute about caps might resolve itself," he said.

Senior CDU member Jens Spahn told Frankfurter Allgemeine Sonntagszeitung he did not understand why the conservative parties were arguing because the CDU had decided back in December that it was necessary to significantly reduce the number of new arrivals to avoid overstraining German society.

The CSU has long criticised Merkel's open-door refugee policy and on Saturday Seehofer said the two conservative parties face election defeats if they remain at odds over migration.

In a regional vote last Sunday Merkel's CDU came in third place, behind the anti-immigrant Alternative for Germany (AfD) -a result that Merkel has acknowledged was a result of her party's pro-refugee stance. The AfD is also expected to perform well in a regional vote in Berlin next Sunday.

An Emnid poll for Bild am Sonntag newspaper showed support for the AfD rising by one point to 13 percent at the federal level while the conservative bloc - made up of the CDU and the CSU - lost one point to 33 percent.

AfD co-leader Frauke Petry told newspaper Welt am Sonntag she wanted to make the AfD the strongest party in opposition in the Bundestag lower house of parliament after next year's vote. It is represented in nine of Germany's 16 state assemblies but has no seats in the federal parliament.

(Additional reporting by Holger Hansen and Andreas Rinke; Editing by Stephen Powell/Ruth Pitchford)

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