Her comments, made in an interview with the Bild am Sonntag newspaper, reflect growing unease among Germany's mainstream parties amid rising popular support for the right-wing AfD and its fierce opposition against Merkel's refugee policy.
Merkel faces one of her toughest electoral tests in three regional elections on March 13. The AfD is set to win almost 20 percent in the eastern state of Saxony-Anhalt and match the ruling Social Democrats in the southwestern state of Baden-Wuerttemberg, according to the most recent polls.
The elections in Saxony-Anhalt, Baden-Wuerttemberg and Rhineland-Palatinate states are Germany's first since last May and will serve as a litmus test of popular feeling after more than one million migrants arrived in Germany last year.
Merkel said government officials and mainstream parties had to challenge the AfD in public debate by clearly distinguishing themselves from its anti-immigrant stance.
The center-right chancellor defended her decision to keep Germany's borders open despite the influx of migrants and reaffirmed her push for a joint European solution, including strengthening the continent's external borders and cooperation with Turkey to stop refugees from traveling on to Europe.
The EU emergency summit with Turkey scheduled on Monday will focus on how Ankara was planning to spend 3 billion euros pledged by EU member states to stem the flow of migrants to Europe, she said.
Austria, one of the last stepping stones to Germany for hundreds of thousands of migrants, recently imposed border restrictions, setting off a domino effect in Europe and leaving tens of thousands stranded in poor conditions in Greece.
The move, which was publicly criticised by Berlin, reduced the number of new arrivals to Germany.
