The inconclusive results made it likely that Germany's next government could be weakened because of the narrow vote margin and difficulties in forming a coalition.
The vote centered on different visions of Germany's role in the world and how to fix its sputtering economy. Schroeder touted the country's role as a European leader and counterbalance to America, while Merkel pledged to reform the economy and strengthen relations with Washington.
Merkel's Christian Democrats failed to win the majority needed to govern, even when combined with her preferred coalition partner, the pro-business Free Democrats.
The Christian Democrats and ally Christian Social Union won 35.2 percent of the vote, compared with 34.3 percent for the Social Democrats, according to the official results. Schroeder's coalition partner, the Greens, won 8.1 percent. The pro-business Free Democrats, with whom Merkel had hoped to form a center-right government, had 9.8 percent. The new Left Party, angered by Schroeder's efforts to trim the welfare state, had 8.7 percent.
The result reflected counting in 298 of 299 districts; voting in the final district, in the eastern city of Dresden, has been delayed until Oct. 2 because of the death of a candidate.
Germany's election authority did not immediately say how the results would translate into parliamentary seats. Turnout was 77.7 percent.