Migrant crisis: Germany considers 'transit zones' on borders
Germany is considering setting up "transit zones" on its borders, where migrants would be kept while their asylum claims are assessed.
But Chancellor Angela Merkel said the proposal would only work in certain cases, and would "not help for thousands and thousands of refugees".
Her Social Democrat (SPD) coalition partners oppose the idea.
Thousands of protesters in the anti-immigration Pegida movement have staged another big rally in Dresden.
An estimated 9,000 attended the rally in the eastern German city - the focal point of Pegida's protests.
The movement includes many anti-Islam and far-right activists. A co-founder of Pegida, Lutz Bachmann, has been charged with inciting racial hatred, after he labelled asylum seekers as "trash" and "animals" on Facebook.
Pegida (Patriotic Europeans Against the Islamisation of the West) has staged many rallies in recent months, attracting tens of thousands of people.
They scorn Ms Merkel's policy of welcoming refugees fleeing war and persecution.
Separately, a fireman and an accomplice are under investigation over an arson attack on a migrants' hostel in Altena, north-western Germany.
The seven Syrians there were evacuated quickly and nobody was hurt.
The fireman admitted to police that he had broken into the hostel via the cellar, splashed petrol on roof beams and set fire to it, German media report.
But the pair - both locals - were released after questioning. State prosecutor Bernd Maas said "the motive was personal conviction, not political" - a finding that angered some politicians. "A far-right mentality consists of more than hatred of foreigners," he said.
Dirk Wiese, an SPD politician, called Mr Maas's opinion "wrong - whoever sets fire to a house where Syrian refugees live is acting out of anti-foreigner motives".
Omid Nouripour, a Greens MP, also accused Mr Maas of "playing down such actions".
The German government says there have been almost 500 attacks on homes intended for asylum seekers this year - three times more than in 2014.
Germany expects to host at least 800,000 asylum seekers this year - a four-fold increase on last year's figure, partly fuelled by the war in Syria.
But about 40% of asylum claims in Germany come from Balkan migrants - often people fleeing dire poverty in Kosovo or Albania, whose claims are usually rejected.
Official figures for January-September this year show that 303,443 requested asylum in Germany, and the top three countries of origin were Syria (73,615), Albania (45,125) and Kosovo (34,723).
To cope with the influx, Ms Merkel's Christian Democrats (CDU) and their Bavarian CSU allies have called for "transit zones" to be set up on Germany's borders - along the lines of airport transit zones.
But SPD politicians have criticised the idea, warning of legal complications. Justice Minister Heiko Maas of the SPD warned against creating "mass camps in no-man's-land".
Ms Merkel said the priority should be to help Turkey to limit the flow of refugees into the EU and to improve its refugee camps.