BERLIN (AP) _ A week after a stinging defeat for his party in two state elections, Chancellor Gerhard Schroeder faced a new tough test Sunday in the eastern state of Thuringia.

Polls showed the chancellor's Social Democrats losing ground in the state, putting the conservative Christian Democrats within reach of a majority that would allow them to end their alliance with the Social Democrats there and govern alone.

Thuringia's four votes in the 69-seat upper house then would swing solidly to the opposition camp. That would make it even harder for Schroeder to pass his legislation, including a three-year government austerity plan.

In addition, the Social Democrats were bracing for losses in voting for local councils in North Rhine-Westphalia, the western industrial heartland that has been one of the party's strongholds for decades.

Schroeder's center-left coalition lost its safe majority in the upper house last February when the Social Democrats lost the Hesse state government. Their position weakened further after losing last Sunday in Saarland and Brandenburg states.

A year after his election, Schroeder's popularity has slid to an all-time low _ the result of bruising policy fights in the coalition, proposals to cut Germany's social safety net and unemployment that remains stuck above 10 percent.

The chancellor tried to rally his party Saturday at an event with local Social Democrat functionaries in Emden in his home state of Lower Saxony.

``We must not lose our self-confidence,'' he told the meeting. ``We have to mobilize our will to fight.''

He again defended his austerity budget against critics _ including leftists in his own party _ who say it's unfairly harsh.

Schroeder's attempts to steer his party toward the political center have alienated many traditional left-wing voters, while centrist voters who lifted him into the chancellery seem to have increasingly lost confidence in his leadership.

In Thuringia, polls show the Social Democrats, led by state Interior Minister Richard Dewes, coming in at 22 percent, down about eight points from 1994. Governor Bernhard Vogel's Christian Democrats were up about two points from the last election, at 45 percent.

The far-right German People's Union, which entered the Brandenburg state parliament for the first time last weekend, took its anti-immigrant campaign to Thuringia. But polls indicated the extreme right vote would be split between several parties, preventing them from winning seats in the state legislature.