BERLIN – Conservative leader Angela Merkel and Chancellor Schroeder failed yesterday to resolve their battle over who should lead Germany’s new government but agreed to meet again to explore forming a right-left coalition to steer efforts to revive Europe’s largest economy.

Both Mrs. Merkel and Mr. Schroeder have laid claim to building Germany’s next government after neither party won a clear majority in parliamentary elections Sunday, leaving the country, the world’s third-largest economy, in political crisis.

The deadlock means Germany could spend weeks without leadership at a time when it desperately needs clear direction to push through badly needed economic reforms. Germany also wants to maintain its strong leadership role within the European Union, particularly in the wake of the E.U.’s failed constitution effort and on the eve of membership talks with Turkey.

Mrs. Merkel said yesterday’s talks took place “in a constructive atmosphere” but indicated her conservative Christian Democratic Union and its sister party, the Bavaria-only Christian Social Union, would not give ground on the issue of who should be chancellor.

“I laid out that I have the responsibility of building a government,” Mrs. Merkel told reporters after the meeting. “And we made it clear that if we come to coalition talks, this question must be cleared up.”

Yet the Social Democrats are holding out with their argument that German voters rejected Mrs. Merkel as chancellor, awarding her party only 27.8% support after months of polling as much as 40%.

Coupled with the Christian Social Union, the conservatives reached 35.2%, just edging Mr. Schroeder’s party, which won 34.3%.

Party head Franz Muentefering insisted the Social Democrats were seeking to build “a stable government for this country, as quickly as possible. A government led by Gerhard Schroeder.”

Mr. Muentefering said his party was eager for more detailed discussions with the conservatives, which Mrs. Merkel said would take place Wednesday and could focus more on policy.

At the same time, the Christian Democrats also are pursuing the possibility of building a coalition with the Free Democrats – whom they met earlier yesterday – and the Greens, whom they are scheduled to meet Friday.

A last option would be for Mr. Schroeder to continue his previous coalition with the Greens. This appears highly unlikely as the Free Democrats have categorically ruled out supporting a Schroeder-led government.

All Germany’s established parties have ruled out talks with the newly formed Left Party, a grouping of former East German communists and renegade Social Democrats opposed to cuts in the country’s welfare programs, that received 8.7% of the vote.