The two leaders had made a decision to focus on broad issues to leave more room for negotiations with the other 17 euro members, Macron said - a scenario that leaves scope for the plans to be watered down.
At the centre of the tensions there is Mrs Merkel's widely criticised immigration programme, which brought more than a million refugees in the country in 2015.
In an unprecedented split between the CDU and CSU, Seehofer has openly defied Merkel with a demand to allow border police to turn back migrants who lack valid identity papers or are already registered in another European Union country.
But it is not granted she will be able to save her leadership with the help of the EU.
The ministerial retreat at Meseberg castle near Berlin aims to agree a joint Franco-German stance ahead of a key June 28-29 summit on the EU's post-Brexit future, at a time when populists and eurosceptics are rapidly gaining ground.More news: Cleveland Cavs Made Calls To Spurs About Kawhi Leonard
Merkel's spokesman Steffen Seibert told reporters that "various aspects of migration policy will be discussed" at the bilateral talks with Giuseppe Conte late Monday.
Seehofer wants Germany to have the right to reject migrants who have already registered in another European Union state but Merkel opposes any unilateral move by him that would reverse her 2015 open-door policy and undermine her authority. Countries like France and Italy have also proposed opening EU immigration centers in some African countries, but the idea may not be enough to discourage people from trying to make it to the European Union.
European Commission President Jean-Claude Juncker said it was "not the American president's role to speculate - as he did yesterday - that the German people would march towards the chancellery to remove Mrs Merkel".
Merkel and Macron jointly stressed the need for an EU-wide solution to the migration crisis that is now casting a shadow over cooperation between European neighbors, according to German news agency dpa.
Trump announced past year that the USA will pull out of the accord negotiated by his predecessor unless he can "get a better deal". Merkel hopes to form an immigration agreement with other European countries in anticipation of the upcoming EU summit and during it.
At the weekend, French Finance Minister Bruno Le Maire and his German counterpart Olaf Scholz met in Hamburg to try to resolve much of the nitty-gritty before Merkel and Macron meet. Or if they had already applied for asylum and been rejected. To that end, it has given aid and money to countries including Turkey, Jordan, Libya and Niger.
Another poll released Friday found that 66 percent of respondents are in favor of a European solution to the refugee issue, promoted by Chancellor Merkel.
Merkel's supporters argue that turning back migrants unilaterally would simply dump the problem on Mediterranean countries such as Italy and Greece, which would also weaken the European Union itself.