--- a/mercurial/filemerge.py	Fri Feb 02 23:20:55 2018 -0500
+++ b/mercurial/filemerge.py	Wed Jan 17 17:35:05 2018 -0800
@@ -513,6 +513,11 @@
     b, c = _maketempfiles(repo, fco, fca)
     try:
         out = ""
+        mylabel, otherlabel = labels[:2]
+        if len(labels) >= 3:
+            baselabel = labels[2]
+        else:
+            baselabel = 'base'
         env = {'HG_FILE': fcd.path(),
                'HG_MY_NODE': short(mynode),
                'HG_OTHER_NODE': str(fco.changectx()),
@@ -520,6 +525,9 @@
                'HG_MY_ISLINK': 'l' in fcd.flags(),
                'HG_OTHER_ISLINK': 'l' in fco.flags(),
                'HG_BASE_ISLINK': 'l' in fca.flags(),
+               'HG_MY_LABEL': mylabel,
+               'HG_OTHER_LABEL': otherlabel,
+               'HG_BASE_LABEL': baselabel,
                }
         ui = repo.ui
 
@@ -528,7 +536,9 @@
             # read input from backup, write to original
             out = a
             a = repo.wvfs.join(back.path())
-        replace = {'local': a, 'base': b, 'other': c, 'output': out}
+        replace = {'local': a, 'base': b, 'other': c, 'output': out,
+                   'labellocal': mylabel, 'labelother': otherlabel,
+                   'labelbase': baselabel}
         args = util.interpolate(br'\$', replace, args,
                                 lambda s: util.shellquote(util.localpath(s)))
         cmd = toolpath + ' ' + args
@@ -566,7 +576,7 @@
 
 _defaultconflictlabels = ['local', 'other']
 
-def _formatlabels(repo, fcd, fco, fca, labels):
+def _formatlabels(repo, fcd, fco, fca, labels, tool=None):
     """Formats the given labels using the conflict marker template.
 
     Returns a list of formatted labels.
@@ -577,6 +587,8 @@
 
     ui = repo.ui
     template = ui.config('ui', 'mergemarkertemplate')
+    if tool is not None:
+        template = _toolstr(ui, tool, 'mergemarkertemplate', template)
     template = templater.unquotestring(template)
     tres = formatter.templateresources(ui, repo)
     tmpl = formatter.maketemplater(ui, template, defaults=templatekw.keywords,
@@ -706,6 +718,7 @@
         mergetype = func.mergetype
         onfailure = func.onfailure
         precheck = func.precheck
+        isexternal = False
     else:
         if wctx.isinmemory():
             func = _xmergeimm
@@ -714,6 +727,7 @@
         mergetype = fullmerge
         onfailure = _("merging %s failed!\n")
         precheck = None
+        isexternal = True
 
     toolconf = tool, toolpath, binary, symlink
 
@@ -743,19 +757,42 @@
     files = (None, None, None, back)
     r = 1
     try:
-        markerstyle = ui.config('ui', 'mergemarkers')
+        internalmarkerstyle = ui.config('ui', 'mergemarkers')
+        if isexternal:
+            markerstyle = _toolstr(ui, tool, 'mergemarkers')
+        else:
+            markerstyle = internalmarkerstyle
+
         if not labels:
             labels = _defaultconflictlabels
+        formattedlabels = labels
         if markerstyle != 'basic':
-            labels = _formatlabels(repo, fcd, fco, fca, labels)
+            formattedlabels = _formatlabels(repo, fcd, fco, fca, labels,
+                                            tool=tool)
 
         if premerge and mergetype == fullmerge:
-            r = _premerge(repo, fcd, fco, fca, toolconf, files, labels=labels)
+            # conflict markers generated by premerge will use 'detailed'
+            # settings if either ui.mergemarkers or the tool's mergemarkers
+            # setting is 'detailed'. This way tools can have basic labels in
+            # space-constrained areas of the UI, but still get full information
+            # in conflict markers if premerge is 'keep' or 'keep-merge3'.
+            premergelabels = labels
+            labeltool = None
+            if markerstyle != 'basic':
+                # respect 'tool's mergemarkertemplate (which defaults to
+                # ui.mergemarkertemplate)
+                labeltool = tool
+            if internalmarkerstyle != 'basic' or markerstyle != 'basic':
+                premergelabels = _formatlabels(repo, fcd, fco, fca,
+                                               premergelabels, tool=labeltool)
+
+            r = _premerge(repo, fcd, fco, fca, toolconf, files,
+                          labels=premergelabels)
             # complete if premerge successful (r is 0)
             return not r, r, False
 
         needcheck, r, deleted = func(repo, mynode, orig, fcd, fco, fca,
-                                     toolconf, files, labels=labels)
+                                     toolconf, files, labels=formattedlabels)
 
         if needcheck:
             r = _check(repo, r, ui, tool, fcd, files)