The Muslim religion "does not belong in Germany", said a top candidate of the Alternative for Germany, Alexander Gauland, who argued that its "political doctrine is not compatible with a free country".
"Islamist rhetoric and violence and terror have roots in the Koran and in the teachings of Islam," he told reporters.
Gauland and the other top AfD candidate, Alice Weidel, have stirred controversy before Sunday's general election.
Gauland has argued Germany should be proud of its veterans of two world wars. And Weidel has reportedly employed an asylum seeker without paying tax, a claim she has denied.
Latest polls show the AfD at 10-12 percent, up from eight-10 percent, potentially making it Germany's third-strongest party.
But Merkel's CDU and its Bavarian allies CSU slipped two points to 36 percent, close to the all-time low of 35 percent when the Social Democrats (SPD) led by Gerhard Schroeder defeated them in 1998.
Merkel's conservative alliance however still commanded a huge lead over the SPD of her top rival Martin Schulz, which slipped to 23 percent.
The trend suggests the AfD will not only be the first right-wing nationalist party to enter the German parliament since 1945 but, depending on what coalition emerges, could also lead the opposition in the Bundestag.
Weidel's ambitions do not stop there. She told the Frankfurter Rundschau daily on Saturday that "the aim of all parties is not to be the opposition, but to govern".
"All our lawmakers should gain professionalism very quickly during the first term, so that by 2021 we are able to govern."
'Bikinis, not burkas'
Founded as an anti-euro party, the AfD recorded a surge in support after it began capitalising on unease in Germany over the arrival of more than a million asylum seekers since 2015.
Its members now sit in 13 of 16 state assemblies and, eyeing the national parliament, have plastered towns and cities with posters carrying the slogans "Burkas? We prefer bikinis" or "New Germans? We make them ourselves!"
Its supporters have loudly disrupted Merkel's rallies, where they loudly jeer, boo and whistle in a bid to drown her out.
One such protester -- who shouted "traitor" at Merkel on Saturday in her Baltic coast constituency Stralsund -- said he was voting AfD because "the issues they raise relate to me".
"Merkel said 12 years ago that there must be controlled immigration," but now "we have uncontrolled immigration, terror attacks", he told AFP.
"For me, she is not electable, and untenable for the people," said the man, who identified himself only as a truck driver born in Stralsund.
As alarm has grown over the AfD's rise, Schulz, who has described the party as "far-right" and its leaders as "racists", warned however against ostracising its supporters.
"We must fight against the leaders of the party, but we must not attack their sympathisers," said the SPD candidate.
"We must listen to the people who are attracted to the AfD. There's no doubt about it. They must be won back."
A leader of the far-left Linke party, Katja Kipping, also urged voters to close ranks and stop the AfD from becoming the biggest opposition force in Germany.
"Those who want to stop a right-wing opposition leader must rely on the left," she told national news agency DPA.