diff -r bcc7139521b7 -r 1e8c7999af86 mercurial/filemerge.py
--- a/mercurial/filemerge.py	Wed Aug 25 16:55:54 2010 -0500
+++ b/mercurial/filemerge.py	Thu Aug 26 17:38:43 2010 +0200
@@ -225,7 +225,8 @@
 
     if not r and (_toolbool(ui, tool, "checkconflicts") or
                   'conflicts' in _toollist(ui, tool, "check")):
-        if re.match("^(<<<<<<< .*|=======|>>>>>>> .*)$", fcd.data()):
+        if re.search("^(<<<<<<< .*|=======|>>>>>>> .*)$", fcd.data(),
+                     re.MULTILINE):
             r = 1
 
     checked = False