The leader of a rising German nationalist party is rejecting accusations that her rhetoric has helped stoke anti-migrant hatred, and says her party offers a "very necessary" option for disgruntled conservatives as regional elections near.

Frauke Petry's upstart Alternative for Germany party has climbed in polls as Germany faces a migrant influx. It advocates much tougher controls and has faced criticism over various comments made, including an interview last month in which Petry herself suggested police could shoot refugees trying to enter Germany.

On Monday, the mayor of the town of Bautzen, where onlookers celebrated as a former hotel being turned into a refugee home burned over the weekend, accused Petry of "spiritual arson" — a phrase often used in Germany to denounce incitement.

Petry rejected that as "cheap polemics."