UPDATE 3-Germany's Merkel banks on Easter circuit-breaker to combat 'new pandemic'

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* Germany extends lockdown until April 18

* Urges citizens to stay home for five days over Easter

* Advises against all travel abroad

* Economists see lockdown extension delaying recovery

* Merkel: EU will "decide responsibly" in AstraZeneca row (Adds Merkel quotes on "new pandemic", AstraZeneca)

By Andreas Rinke

BERLIN, March 23 (Reuters) - Germany is extending its lockdown until April 18 and calling on citizens to stay at home for five days over the Easter holidays to try to break a third wave of the COVID-19 pandemic, Chancellor Angela Merkel said early on Tuesday.

In talks that ran deep into the night, Merkel pushed the leaders of Germany's 16 states to take a tougher stance to fight the pandemic, reversing plans for a gradual re-opening of the economy agreed earlier this month after a sharp rise in the infection rate.

"We are now basically in a new pandemic. The British mutation has become dominant," Merkel told a news conference.

"Fundamentally, we face a new virus of the same kind but with very different characteristics. More deadly, more infectious, and infectious for longer."

Germany started cautiously easing restrictions earlier this month. But the spread of more infectious variants of the virus has pushed up cases, prompting concerns that hospitals could soon be overstretched without further curbs.

The number of cases per 100,000 people over a week stood at 107 on Monday, above the level at which intensive care units will be overwhelmed. More than 3,000 people with COVID-19 are in intensive care.

On Monday, Britain demanded the European Union allow the delivery of COVID-19 vaccines it has ordered as tensions over a possible export ban on EU-manufactured shots mounted and Brussels pointed an accusing finger at drugmaker AstraZeneca .

After falling far behind post-Brexit Britain and the United States in rolling out vaccines, EU leaders are due to discuss a possible ban on vaccine exports to Britain at a summit on Thursday.

"We have a problem - that was known - with AstraZeneca," Merkel said, adding that she supported the European Commission. "We will decide responsibly."

For five days from April 1, Germans are to stay at home and reduce contacts as much as possible. But the late-night agreement did not include a closing of all stores, including essential shops like supermarkets, which Merkel had called for.

Big family gatherings will be banned over the holidays, with no more than two households, or up to five people, being allowed to meet. The government will ask churches to hold any Easter services online to avoid gatherings.

Economists said the extension of Germany's lockdown measures would delay a much hoped-for recovery in Europe's largest economy from spring until early summer.

EASTER TRAVEL

Talks had dragged on for hours as Merkel and state leaders were at loggerheads over whether to ease restrictions on domestic travel over the Easter holiday season.

Germans can travel freely even amid the pandemic, but hotels and holiday resorts in the country are not allowed to rent rooms to tourists. That leaves travel abroad as the only option for those who are desperate to go on holidays.

"We advise against all travel abroad," Merkel said.

Airlines will now be responsible for ensuring all travelers and crew are tested for the coronavirus prior to departure to Germany, regardless of the infection rate in the country they have visited.

But Merkel and the state leaders stopped short of imposing mandatory quarantine for all returning travelers, a relief for holiday destinations such as Spain's Mallorca that are banking on a boost from Easter travel business.

Merkel said Germany was in a race against time to vaccinate its population before new coronavirus variants took over. Some 9% of Germans have received at least one shot of vaccine, but the pace of vaccinations is expected to pick up next month.

"Things are tough longer than we had expected, but there is very clearly light at the end of the tunnel," Merkel said. (Additional reporting by Thomas Escritt and Paul Carrel; Writing by Maria Sheahan; Editing by Muralikumar Anantharaman)