By Noah Barkin and Elizabeth Piper
BRUSSELS (Reuters) - German Chancellor Angela Merkel offered one of her most positive assessments of Brexit talks in months on Thursday, saying she believed negotiations between the EU and Britain were moving forward and dismissing the prospect of a breakdown.
Merkel made her comments after the first day of a European Union summit at which British Prime Minister Theresa May appealed to her fellow leaders to help her silence critics at home and break a deadlock in the talks.
"In contrast to how it is portrayed in the British press, my impression is that these talks are moving forward step by step," Merkel told reporters, dismissing suggestions from some in Britain that the talks should be broken off as "absurd".
"I have absolutely no doubts that if we are all focused ... that we can get a good result. From my side there are no indications at all that we won't succeed," she said.
Earlier, in remarks delivered at the end of a dinner of butternut gnocchi and pheasant supreme, May sought to calm fears that Britain would use its departure in March 2019 to undercut the bloc's economy by lowering standards and taxes.
She asked EU leaders to respond in kind to her efforts to break the Brexit stalemate, making clear she was disappointed at their plan to announce on Friday that talks have not yet made enough progress to move on to a discussion of future trade ties.
The EU is seeking a clearer commitment from Britain that it will settle financial obligations linked to its exit. Leaders will on Friday set a target of December for London to improve its divorce settlement offer.
But they will also make a gesture by launching internal preparations for the next phase of the negotiations.
In choreography that contrasted with images of May standing isolated in Brussels at previous summits, Merkel and French President Emmanuel Macron were filmed by television cameras engaging the British prime minister in an animated conversation at the start of the summit.
Merkel said the three had been discussing the need to safeguard the Iran nuclear deal after U.S. President Donald Trump's decision last week to "decertify" it.
May underlined the "difficult political background" she faces if she returns home empty-handed and said she had realized at the end of the summer what difficulties the talks were in.
"I took stock, listened to what the people in the UK were saying and what my friends and partners in Europe were saying and I made a step forward," she was quoted as saying by a British official, referring to a speech she made in Florence on Sept. 22.
Merkel repeatedly referred to the speech as an "important" signal from May.
There was no discussion after May spoke, according to an EU diplomat. Donald Tusk, who chairs EU summits, said only that the leaders took note of her comments. Dutch Prime Minister Mark Rutte told reporters that she had made no new proposals.
Weakened after losing her Conservatives' majority in a June election and by failing to rally support at an ill-fated party conference, May needs to keep the talks on the road to silence the voices calling for her to walk away from the negotiations.
The talks have stalled largely over how much money Britain owes when it leaves the bloc, with EU leaders urging May on Thursday to give more detail on how she will settle the bill.
May instead proposed more moves to protect the rights of EU citizens in Britain - one of three issues the bloc says must be settled before moving to discuss a future trading relationship.
After May leaves the summit on Friday morning, the other 27 leaders are due to call on their staff to prepare for talks on a transition period that would smooth Britain's exit in 2019.
That may be enough for May to stave off an attempt by several Brexit campaigners for her to walk away.
"There is increasingly a sense that we must work together to get to an outcome we can stand behind and defend to our people," May told the other leaders, according to the British official.
(Additional reporting by Gabriela Baczynska, Jan Strupczewski and Alastair Macdonald; Editing by Alastair Macdonald)