diff -r 7ca534f31a83 -r d084df89d948 mercurial/filemerge.py
--- a/mercurial/filemerge.py	Sun Dec 16 20:50:57 2012 +0100
+++ b/mercurial/filemerge.py	Tue Jan 08 04:15:41 2013 +0100
@@ -204,6 +204,10 @@
     Uses the internal non-interactive simple merge algorithm for merging
     files. It will fail if there are any conflicts and leave markers in
     the partially merged file."""
+    tool, toolpath, binary, symlink = toolconf
+    if symlink:
+        return False, 1
+
     r = _premerge(repo, toolconf, files)
     if r:
         a, b, c, back = files