By Joseph Nasr

BERLIN (Reuters) - Europe's refugee crisis has resurrected Germany's AfD anti-immigrant party, which aims to enter three new state parliaments next year by luring conservative voters angry with Chancellor Angela Merkel's open-door asylum policy.

The Alternative for Germany party holds its annual congress this weekend in Hanover, where it will outline its plan to bring order to what it calls the "asylum chaos."

After imploding over a bitter leadership struggle in July, the AfD placed third nationally, at 10.5 percent, for the first time this month in a survey for pollsters INSA.

"The refugee crisis has brought the AfD back from the dead," said Manfred Guellner, head of Forsa, another polling institute.

The party won seats in the Hamburg state assembly in February, entering a legislature in western Germany for the first time, and has since also gained seats in Bremen.

It previously had seats in Saxony, Thuringia and Brandenburg in eastern Germany - where resentment against refugees is greatest - and is gaining further momentum nationally as a fraught debate over whether to cap an influx expected to top 1 millions migrants this year has exposed rifts in Merkel's ruling conservative coalition.

The AfD was polling around 3 percent in July after leader Bernd Lucke left the party he had founded in 2013 as a vehicle for opposing euro zone bailouts, accusing it of developing xenophobic tendencies.

"As long as the government continues to look dysfunctional on the refugee question, the AfD will benefit," said professor Hajo Funke of the Free University in Berlin.

Under Lucke's successors Frauke Petry and Joerg Meuthen, the party has espoused a tough line on immigration and virtually ignored euro zone issues.

"Frauke Petry has turned the AfD into a magnet for right-wing radicals," Forsa's Guellner said.

'FULLY GERMAN'

Other prominent hawkish AfD officials include Marcus Pretzell, a European lawmaker, who told the German news agency dpa this month that "armed violence" was a possible "last resort" to defending the German border if the refugee influx persisted.

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Such speeches have found resonance with some voters in eastern states that have higher unemployment rates and more active support for far-right causes than in the west.

But the party also harbours its own divisions, with co-leader Meuthen - who acts as a moderating force - telling Reuters that exhortations to keep Germany for the Germans would not play well with voters in his home state of Baden-Wuerttemberg in the south west.

That state, along with neighbouring Rhineland-Palatinate and Saxony-Anhalt in the east, holds elections in March and the AfD will have its eyes on those ballots at this weekend's congress.

Both the conservatives and their Social Democrat coalition partners have ruled out state-level coalitions with the AfD.

Petry and Pretzell, who started dating this year after she left her pastor husband, will on Friday for the first time attend the Federal Press Ball, an annual event that brings together politicians, economists, celebrities and journalists.

It is the clearest sign yet that the AfD is gearing up for its first run at a federal election in 2017.

But the AfD could implode before then in the event of another power struggle, or should the refugee crisis peter out.

"Regardless of what happens in state elections, it is no sign that the AfD will make it into the Bundestag (federal parliament)," said Guellner. "I'm guessing the AfD will decline before the election."

(editing by John Stonestreet)