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German Chancellor Angela Merkel's conservative party has won elections but finished just short of an absolute majority, official results show.

Mrs Merkel earlier urged her party to celebrate "a super result" after exit polls suggested she was set to win a historic third term.

Her Christian Democrats (CDU) took about 42% of the vote.

But she might yet have to seek a grand coalition with the Social Democrats (SPD) who won about 26% of the vote.

Mrs Merkel's preferred liberal partners appear not to have made it into parliament.

Exit polls for ARD public television put the liberal Free Democrats (FDP) on 4.7%, which if confirmed would be a disaster for the junior coalition partner, leaving it with no national representation in parliament.

Party chairman Philipp Roesler called it "the bitterest, saddest hour of the Free Democratic Party".

The FDP was beaten by the Green Party (8%) and the former communist Left Party (8.5%), and even, according to exit polls, the new Alternative fuer Deutschland, which advocates withdrawal from the euro currency and took 4.9%, just short of the parliamentary threshold.

There was at one point speculation on German television that Mrs Merkel's CDU and their Bavarian sister CSU might even win enough seats for an absolute majority - the first in half a century.

The ARD channel's projection had her group winning 297 seats against 301 for the other three parties, while ZDF had her even with the other three.

'Something fantastic'

Mrs Merkel earlier addressed jubilant supporters at CDU headquarters. After waiting for chants of "Angie, Angie" to die down, she told them: "This is a super result."

"We can celebrate tonight because we have done something fantastic."

But, in a reference to coalition building, she said it was "too early to say exactly what we'll do".

Correspondents say that the 59-year-old chancellor seemed to acknowledge the complexities of forming a government when she was asked on television if she planned to reach out to other parties.

"Maybe we won't find anyone who wants to do anything with us," she replied.

Correspondents say that the result is nevertheless a ringing endorsement of her steady leadership during the euro zone crisis.

CDU parliamentary group leader Volker Kauder said that the party "has a clear mandate from voters to form a government". The outcome showed that "voters want Angela Merkel to remain chancellor" for a third term, he said.

Mrs Merkel has made clear she would be prepared to work with the Social Democrats (SPD) in a grand coalition, as she did in 2005-09.

The SPD has been more reluctant to consider linking up with the CDU/CSU again. The party leader, Peer Steinbrueck, was finance minister in the previous grand coalition, but has said he would not serve in such a government again.

Correspondents say that whatever the shape of the coalition that ends up forming the government, there probably will not be any significant policy shifts, although there might be a slightly softer tone to Europe's debt crisis.

Several weeks of difficult negotiations are expected.

After the exit polls were released, but before official results were confirmed, Mr Steinbrueck conceded that it would be up to Mrs Merkel to decide how to proceed saying: "The ball is in Mrs Merkel's court. She has to get herself a majority."

The BBC's Chris Morris, at Social Democrat headquarters, said Mr Steinbrueck was putting a brave face on it but the atmosphere was subdued.

The SPD would have preferred to enter a coalition with the Green Party, but does not appear to have the votes to do so, and has ruled out a three-way alliance including the Left Party (Die Linke).

Analysts think the SPD will probably agree to a coalition with the CDU/CSU.

Turnout, projected at about 72%, was higher than at the last federal election - which had the worst on record.