Germany's center-left Social Democratic Party, or SPD, on Thursday began three-way talks with the environmentalist Greens and pro-business Free Democratic Party, or FDP, to explore the possibility of a "traffic light" coalition government.

At present, there have only been two-way talks between parties since the SPD won last month's national election. This is the first time the respective third- and fourth-place finishers will measure the likelihood of an alliance together.

Members of all three parties have gathered in Berlin for exploratory talks that are expected to last around a week, reported Reuters, citing sources with knowledge of the negotiations. They said they would reconvene on Monday.

Chancellor Angela Merkel's ruling conservative alliance of the Christian Democratic Union, or CDU, and Christian Social Union, or CSU, finished second in the Sept 26 election, suffering its worst-ever defeat.

The three-way talks move the SPD's leader Olaf Scholz closer to becoming Germany's next chancellor. Scholz is set to replace the outgoing Merkel, who has been the nation's leader for 16 years and will step down once a new government is formed.

Armin Laschet, the CDU's conservative chancellor candidate, had also proposed forming a government with the FDP and the Greens, but the two smaller parties have now taken a clear step toward its rival SPD, reported broadcaster Deutsche Welle.

The CSU's leader Markus Soder told reporters on Wednesday that talks among the Greens, FDP and SPD amounted to a "de facto rejection" of a conservative-led government.

Political overlap

"The FDP and Greens have decided on this path," Soder said. "They must now pursue it with due rigor."

Deutsche Welle reported that the SPD and the Greens overlap politically on social policy and the environment, while the SPD may find agreement with the FDP on economic policy more challenging.

Robert Habeck, the Greens' co-leader, told reporters on Wednesday that serious negotiation with the SPD "makes the most sense".

"Last week's talks showed this is where the greatest overlaps are conceivable, especially in the broad area of social policy," he said.

The goal with talks is to take the election results and "translate them into political results", rather than continuing to play a political "poker game", Habeck added.

Both parties emphasized that the door was still open for a coalition with the conservatives.

"For the FDP, it's clear that the content overlaps with the (CDU/CSU) union are the largest," said Christian Linder, the FDP's party leader, to public broadcaster ARD. A coalition under the conservatives "is still a viable option for us", he said.

News site Politico noted a Forsa poll this week found that 53 percent of German voters preferred a traffic light coalition. It said just 22 percent want a government led by the CDU/CSU, Greens and the FDP, which is often referred to as a "Jamaica" coalition as the parties' colors match those of the Jamaican flag.