Berlin: Chancellor Angela Merkel clinched a fourth term in Germany's election Sunday, but her victory was clouded by the entry into parliament of the hard right AfD, the best showing for a nationalist force since World War II.
Merkel, who after 12 years in power held a double-digit lead for most of the campaign, scored around 33 percent of the vote with her conservative Christian Union (CDU/CSU) bloc, according to exit polls.
Its nearest rivals, the Social Democrats and their candidate Martin Schulz, came in a distant second, with a post-war record low 20-21 percent.
But in a bombshell for the German establishment, the anti-Islam, anti-immigration Alternative for Germany (AfD) captured around 13 percent, catapulting it to become the country's third biggest political force.
Commentators called the AfD's strong performance a 'watershed moment' in the history of the German republic. The top-selling Bild daily called it a 'political earthquake'.
Supporters gathered at the AfD party headquarters in Berlin cheered as public television reported the outcome, many joining in a chorus of the German national anthem.
The four-year-old nationalist party with links to the far-right French National Front and Britain's UKIP has been shunned by Germany's mainstream but was able to build on particularly strong support in ex-communist eastern Germany.
It is now headed for the opposition benches of the Bundestag lower house, dramatically boosting its visibility and state financing.
Alarmed by the prospect of what foreign minister Sigmar Gabriel branded 'real Nazis' entering parliament, the candidates had used their final days of campaigning to implore voters to reject the populists.
Merkel basked in her win but admitted that she had fallen far short of the 40-percent goal her party set.
"There's a big new challenge for us, and that is the entry of the AfD in the Bundestag," said Merkel, adding: "We want to win back AfD voters."
Germans voted in a splintered parliament, reflecting an electorate torn between a relatively high degree of satisfaction with Merkel and a desire for change after more than a decade of her leadership.
Another three parties cleared the five-percent hurdle to be represented in parliament: the liberal Free Democrats at around 10 percent and the anti-capitalist Left and ecologist Greens, both at about nine percent.
As Merkel failed to secure a ruling majority on her own and with the dejected SPD ruling out another right-left 'grand coalition' with her, the process of coalition building was shaping up to be a thorny, months-long process.
Merkel, 63, often called the most powerful woman on the global stage, ran on her record as a steady pair of hands in a turbulent world, warning voters not to indulge in 'experiments'.
Pundits said Merkel's reassuring message of stability and prosperity resonated in greying Germany, where more than half of the 61 million voters are aged 52 or older.
Her popularity had largely recovered from the influx since 2015 of more than one million mostly Muslim migrants and refugees, half of them from war-torn Syria, Iraq and Afghanistan.