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The embattled leader says Europe has an obligation to take displaced people from Syria and Iraq.

She also said Islam "is not the cause of terrorism" and that combatting extremism needs the cooperation of Muslim countries.

In a wide-ranging speech at a Munich security conference, the German chief also vowed to work closely with Vladimir Putin's Russia in the fight with ISIS in the Middle East.

(Image: GETTY)

Mrs Merkel has come under fire for taking in up to one million refugees amid security concerns and a string of migrant sex attacks across Germany.

After the Berlin lorry attack at a Christmas market in December, ex-UKIP leader Nigel Farage said events such as that will be "Merkel's legacy".

Mrs Merkel had been a strong critic of Brexit, saying she had "deep regrets" about it.

Daily Star Online has revealed how Brexit may not reduce migration, with 650,000 immigrants set to head to our shores anyway.

She will go to the polls in September against Social Democrat candidate Martin Schulz, the former European Parliament President.

On Putin, she said Europe's ties with Russia remained challenging, but it was important to work with them in the fight against Islamist terrorism.

She said: "The joint fight against Islamic terrorism is one area where we have the same interests and we can work together."

Her comments about Islam and refugees follow her criticism of Donald Trump's travel ban on people from seven Muslim-majority countries.

New US Vice-President Mike Pence was in the audience and reaffirmed the US' commitment to NATO in a speech of his own.

Germany is under increasing pressure to increase military spending, would do "everything possible" meet a NATO target for spending two percent of economic output on defence by 2024, Merkel told the conference.

Only last week, a student was dragged into woods and raped by a migrant who spoke no English near the campus of Bochum University.