( dpa ) - German Chancellor Angela Merkel put on a brave face Monday after her conservative party lost support in two state elections ahead of national polls due next year.
Merkel said her broad coalition with the centre-left Social Democrats (SPD) would carry on its search for political solutions that would lead to "more jobs and prosperity for all."
She was speaking a day after her Christian Democrats (CDU) lost their absolute majority in the state of Hesse and saw support for them slump by 4 per cent in Lower Saxony.
Analysts said the result increased pressure on Merkel, who backed the controversial campaign by Hesse's incumbent Premier Roland Koch highlighting crime committed by young foreigners.
"The loss has weakened the CDU," said Sebastian Bukow, a political researcher at Berlin's Humboldt University. "Governing is not going to become easier."
Merkel described the setback in Hesse as "painful," but said the CDU remained the strongest party in the state and would enter into talks about forming a coalition.
SPD leader Kurt Beck said the result in Hesse showed that a large number of voters in the state "no longer wanted to have Roland Koch as head of their government."
In Hesse, the CDU won 36.8 per cent of the vote, leaving it with a wafer-thin 0.1 per cent majority over the SPD, although both parties were tied on 42 seats each in the 110-member legislature.
Neither the CDU and its preferred coalition partner, the FDP, nor the SPD with the Greens as a junior partner were in a position to form a government.
With the SPD ruling out a coalition including the minority Left Party, the state faced a protracted period of political horse-trading that analysts said could last for weeks.
A clear winner was the Left Party, which secured 7 per cent in Lower Saxony, entering the state parliament for the first time. In Hesse, the party just cleared the 5-per-cent hurdle to gain parliamentary representation.
The Left, made up of former East German communists and a far-left SPD splinter group, is now represented in the legislatures of nine of Germany's 16 federal states.
Although support for the Social Democrats surged in Hesse, it fell to its lowest level ever in Lower Saxony where the result underscored Premier Christian Wulff's position as a potential successor to Merkel as CDU leader.
Koch had run a campaign polarizing the electorate, while his SPD challenger, Andrea Ypsilanti, concentrated on the traditional SPD themes of low wages, education and integration of minorities.
Analysts said the SPD was also under pressure at national level to sharpen its profile ahead of the next federal elections that must take place by September 2009.
"There is an increasing sense of nervousness on both sides," said Bukow. "The CDU suffered considerable losses, but the SPD's result was not all that good, either. It made gains in Hesse but its showing there was its second-worst ever."
Bukow said neither the CDU nor the SPD have any reason to pull out of their government of national unity formed after inclusive general elections in 2005.
"There is no alternative but to continue working together," he said.
Germany's next state elections are scheduled for February 24 in the city-state of Hamburg, where the ruling CDU headed by popular Mayor Ole von Beust is currently leading in the polls.