German Chancellor Angela Merkel's conservatives and the center-left Social Democrats nudged closer Friday to an agreement on a coalition government after reaching new compromises on infrastructure, environment and other issues.

The two sides have set Sunday as a deadline to wrap up their negotiations, though they've budgeted two extra days for talks that they're widely expected to use.

"Care over speed," is what's needed now, Social Democrats leader Martin Schulz told reporters.

The dpa news agency reported that following an earlier deal on migration, pensions and education, the two sides have reached a consensus on expanding Germany's infrastructure for electric cars, health care financing and tax benefits to promote research and development.

Still, Merkel told reporters "a whole series of very serious differences" still need to be reconciled before the agreement can be concluded.

"We have the good will to overcome them, but there is still a huge amount of work ahead of us," she said.

Similarly, Schulz cautioned that "tough negotiations" lie ahead this weekend.

Neither leader gave any details, but dpa reported one sticking point is the question of how many migrants per year Germany should let in. A preliminary agreement that set the stage for the coalition negotiations suggested a range of between 180,000 to 220,000 but each side has interpreted differently how strictly those numbers should be followed.

If a coalition agreement is reached, the Social Democrats' membership still needs to approve it and it faces tough resistance, especially from the party's youth wing. A rejection would leave a minority government under Merkel, or a new election as the only viable options.

Merkel has said she is not interested in a minority government and the latest polls suggest a new election would produce similar results to September's vote, which would leave the parties in the same situation.

If approved, officials say they hope to be able to form a new German government by Easter.