(CNN) German Chancellor Angela Merkel has agreed to aim for a limit on Germany's refugee intake, marking a significant retreat from her previous rejection of a cap.

Merkel made the announcement Monday in a joint news conference with Horst Seehofer, leader of the Christian Social Union -- the more conservative sister party to Merkel's Christian Democratic Union -- after discussions in which the two parties sought compromises on a number of issues following poor results in the federal elections two weeks ago.

The parties have agreed to try and limit the number of refugees arriving in Germany each year to 200,000 -- a policy that Seehofer has repeatedly demanded and Merkel had consistently rejected.

"On the issue of an upper limit, my position is clear," Merkel said in July. "I won't accept one."

Nearly three months later, that position has changed. "I'm pleased about the compromise we've found," she said Monday, describing the deal as a "very, very good basis" for the two parties to enter coalition talks next week.

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