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Mayor of Berlin Michael Mueller, German Chancellor Angela Merkel and German Interior Minister Thomas de Maiziere arrive to lay flowers near where yesterday a truck ploughed through a Christmas market on December 20, 2016 in Berlin, Germany

It was a scenario long feared by German authorities but still stunning in its horror: a deliberate attack on a Christmas market in the heart of Berlin as the driver of a truck plowed into people gathered for an evening of holiday cheer.

Monday's attack represents a vital test for Chancellor Angela Merkel, the de facto leader of Europe who is seen by many Germans as a guarantor of stability. With federal elections looming next year, the violence provides a potential opening for some of Ms. Merkel's critics, who claim that her response to Europe's refugee crisis has made the country less safe.

Ms. Merkel, sombre and dressed in black, visited the site of the attack on Tuesday morning, leaving a white rose in honour of the 12 people killed. Dozens more were seriously injured. "We don't want to live with the fear of evil paralyzing us," she said. "We will find the strength for a life as we want to live it in Germany: free, united and open."

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She said the possibility that the perpetrator could be an asylum seeker was "especially hard to bear." Such a prospect would be "especially despicable toward the many, many Germans who are daily engaged in helping refugees, and toward the many, many people who truly need this protection and strive to integrate themselves in our country."

On Tuesday, investigators were still racing to identify and apprehend the perpetrator of the attack in the market. An earlier suspect, a 23-year-old asylum seeker from Pakistan, was released due to a lack of evidence. The Islamic State claimed responsibility for the attack, according to a news agency affiliated with the militant group, but provided no details on the culprit.

While much remains unknown about the attack – including whether or not any asylum seekers were involved – it is already turning into a major political challenge for Ms. Merkel, who will seek her fourth term as chancellor in federal elections scheduled for September of next year.

"This is pretty much the ultimate nightmare scenario she always expected might happen," said Stefan Kornelius, the author of a biography of Ms. Merkel. Some critics are saying that this is "payback time for being too open and too welcoming a year ago."

Last year, Germany opened its doors to a historic movement of refugees, many of them fleeing conflicts in the Middle East. In 2015, 890,000 asylum seekers arrived in Germany. This year, the flow of migrants has decreased dramatically after the European Union reached an agreement with Turkey aimed at preventing people from crossing the Mediterranean to Greece.

In the wake of the attack, Horst Seehofer, a conservative ally of Ms. Merkel's in Bavaria, said the government must rethink and change its immigration and security policy. An upstart far-right anti-immigrant party, the Alternative for Germany, went much further. "These are Merkel's dead!" wrote Marcus Pretzell, the party's chairman, on Twitter, less than an hour after the attack.

The Alternative for Germany "will very clearly instrumentalize the event," said Nico Lange, an expert on German politics at the Konrad Adenauer Foundation in Berlin. "They feel encouraged by the success of the Brexit campaign and also by the election of Donald Trump, where migration and very aggressive propaganda against migration seemed to help win."

Mr. Lange walks by the site of the attack each day on his way to work. It's a location filled with symbolism: the heart of the former West Berlin and home to a church that serves as a monument to the costs of war and tyranny.

On Monday night, crowds were strolling through the Christmas market right next to the church. A beloved German holiday tradition, the markets are places where Berliners gather on dark winter evenings to eat, drink and socialize under rows of sparkling lights.

In her remarks, Ms. Merkel echoed the shock that many Germans feel at seeing a Christmas pastime turned into a place of carnage. But she eschewed any rhetoric invoking a war-like response.

Ms. Merkel "has an idea of what the terrorists want to achieve, which is panic, uncertainty, overreaction," said Daniel Koehler, director of the German Institute on Radicalization and De-Radicalization Studies in Berlin. "She has done immensely well compared to other Western politicians."

Even after 11 years in power, Ms. Merkel remains popular. Her steady, unpretentious brand of politics appeals to many Germans, as does her track record of presiding over an economy with very low levels of unemployment. Her centre-right Christian Democratic Union party governs in a coalition with the centre-left Social Democrats.

But the refugee crisis dented her standing among some voters. As a result, over the past year, Ms. Merkel's government has tightened policy toward asylum seekers, reducing the amount of time some are allowed to remain in the country and ramping up deportations when asylum claims are rejected.

Daniela Schwarzer, director of the research institute at the German Council on Foreign Relations, asserted that Ms. Merkel's success in next year's elections depends on keeping the inflow of migrants under control and on preventing future attacks.

"If nothing further happens, she may be able to calm things down," said Ms. Schwarzer. But if there are violent incidents involving asylum seekers, Ms. Merkel "will be judged on a liberal migration policy that has undermined domestic security."

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