Italy blocks EU summit agreement until migration demands met

That could trigger the collapse of Merkel's three-month-old government and cause the EU's Schengen free travel zone to unravel, putting cross-border business, trade and many jobs among the EU's 500 million citizens at risk.

"Europe faces many challenges, but that of migration could become the make-or-break one for the EU," Merkel said in a speech to parliament before travelling to Brussels.

Her 2015 decision to open Germany's borders to over a million refugees has divided Europe and continues to haunt her at home even though arrivals have dropped sharply.

Fewer than 45,000 migrants have made it to the European Union this year, according to United Nations data. A thousand more have perished trying to cross the Mediterranean.

According to draft conclusions circulated before the two-day summit, the leaders planned to agree measures to strengthen Europe's external borders, spend more on fighting illegal immigration and step up cooperation to prevent refugees and migrants from moving within the bloc.

They were due to give more money for Syrian refugees in Turkey and migration projects in Africa, as well as look at sealing a deal with Morocco to reverse a recent uptick in arrivals in Spain.

But the EU remains deeply divided over how to handle asylum seekers, with the ex-communist easterners led by Poland and Hungary refusing to accept a share of the new arrivals to alleviate the burden on Italy and Greece, struggling to cope.

A migration deal among all 28 EU states is unrealistic, so Merkel is pushing for a "coalition of the willing" on migration. She hopes that will appease the CSU, which has hardened its line before an autumn election in its home region of Bavaria, the main German entry point for migrants.

Convincing Italy to do a deal may be the biggest challenge. Conte has rejected any moves that would make it handle more even more people.

Currently most of those picked up by rescue boats in the Mediterranean disembark in Italy. But Rome has in recent days refused to let in two such boats with hundreds of people aboard as Conte wants other coastal countries to take some of them in as well.

Reuters