BERLIN -- Germany's two biggest political parties moved closer yesterday toward a power-sharing accord, as Chancellor Gerhard Schroeder and his conservative rival, Angela Merkel, agreed to hold a meeting over which of them would lead the country.
Neither backed off a demand to be chancellor.
Both, however, seemed upbeat after a third round of preliminary talks between their parties. . Both indicated that they had made progress in building a new government to end Germany's leadership crisis, which was set off when no party won a majority in Sept. 18 parliamentary elections.
Schroeder said the talks yesterday had given the sense of ''a basis for a 'grand coalition.' "
Such a coalition would Schroeder's left-of-center Social Democrats and of Merkel's conservative Christian Democratic Union and its Bavarian sister party, the Christian Social Union.
Schroeder said the meeting with Merkel would be held ''very, very soon." His economy minister, Wolfgang Clement, said it would probably happen before the coming weekend.
Officials speaking on condition of anonymity, because they had not been authorized to release the information, said the meeting could take place this evening.
Party leaders say Germany, Europe's biggest economy, needs a stable government quickly to tackle high unemployment and slow growth -- and to support Germany's role as the European Union's largest member.
The government also faces foreign policy issues such as negotiations with Iran over its nuclear program and the state of relations with the United States, which have been frayed by Schroeder's opposition to the war in Iraq.
Both Schroeder and Merkel seemed relaxed after their two-hour meeting, in contrast to the bruising exchanges immediately after the vote.
Merkel, who would be Germany's first woman chancellor, said she was ''more optimistic than pessimistic" after the talks yesterday, which she said had gone ''very successfully."
Conservatives have insisted that Schroeder's party back off its assertion to keep him as chancellor before entering talks on forming a coalition.
The two parties have been forced toward a political marriage of convenience because voters ousted Schroeder's seven-year government of Social Democrats and Greens, but also denied the conservatives a majority.
Merkel says that she, as the leader of the strongest group in parliament, should be chancellor.
Her Christian Democrat-Christian Social Union group won the most seats in parliament, with 226 seats to 222 for Schroeder's Social Democrats in the 614-seat Bundestag, or lower house. To form a government, 308 seats are needed.
''We have agreed that to clear up the question, particularly the personnel question, the workings of a government and possibly some questions on content, there will be another summit," Merkel told reporters.
The planned meeting probably would involve Schroeder, Merkel, Schroeder's Social Democratic chairman, Franz Muentefering, and Edmund Stoiber, head of the Christian Social Union.
Participants indicated that they had found common ground on issues such as health care and government spending.