--- a/mercurial/merge.py	Wed Sep 30 17:51:40 2020 +0530
+++ b/mercurial/merge.py	Wed Sep 30 18:07:21 2020 +0530
@@ -1215,6 +1215,21 @@
                 repo.ui.note(_(b" %s: picking 'keep absent' action\n") % f)
                 mresult.addfile(f, *bids[mergestatemod.ACTION_KEEP_ABSENT][0])
                 continue
+            # ACTION_KEEP_NEW and ACTION_CHANGED_DELETED are conflicting actions
+            # as one say that file is new while other says that file was present
+            # earlier too and has a change delete conflict
+            # Let's fall back to conflicting ACTION_CHANGED_DELETED and let user
+            # do the right thing
+            if (
+                mergestatemod.ACTION_CHANGED_DELETED in bids
+                and mergestatemod.ACTION_KEEP_NEW in bids
+                and len(bids) == 2
+            ):
+                repo.ui.note(_(b" %s: picking 'changed/deleted' action\n") % f)
+                mresult.addfile(
+                    f, *bids[mergestatemod.ACTION_CHANGED_DELETED][0]
+                )
+                continue
             # If keep new is an option, let's just do that
             if mergestatemod.ACTION_KEEP_NEW in bids:
                 repo.ui.note(_(b" %s: picking 'keep new' action\n") % f)

--- a/tests/test-merge-criss-cross.t	Wed Sep 30 17:51:40 2020 +0530
+++ b/tests/test-merge-criss-cross.t	Wed Sep 30 18:07:21 2020 +0530
@@ -855,30 +855,61 @@
   no merge state found
 
 (merging a deletion with keeping → conflict)
-BROKEN: this should result in conflict
 
   $ hg update --clean 'desc("merge-keeping-the-file-from-deleted")'
   0 files updated, 0 files merged, 0 files removed, 0 files unresolved
+#if newfilenode
+  $ hg merge          'desc("merge-deleting-the-file-from-deleted")'
+  file 'the-file' was deleted in other [merge rev] but was modified in local [working copy].
+  You can use (c)hanged version, (d)elete, or leave (u)nresolved.
+  What do you want to do? u
+  0 files updated, 0 files merged, 0 files removed, 1 files unresolved
+  use 'hg resolve' to retry unresolved file merges or 'hg merge --abort' to abandon
+  [1]
+#else
   $ hg merge          'desc("merge-deleting-the-file-from-deleted")'
   0 files updated, 0 files merged, 0 files removed, 0 files unresolved
   (branch merge, don't forget to commit)
+#endif
   $ ls -1
   other-file
   the-file
+
+#if newfilenode
   $ hg debugmergestate
   local (working copy): 38a4c3e7cac8c294ecb0a7a85a05464e9836ca78 (newfilenode !)
   local (working copy): e9b7081317232edce73f7ad5ae0b7807ff5c326a (old !)
   other (merge rev): adfd88e5d7d3d3e22bdd26512991ee64d59c1d8f
+  file: the-file (state "u")
+    local path: the-file (hash 6d2e02da5a9fe0691363dc6b573845fa271eaa35, flags "")
+    ancestor path: the-file (node 59e363a07dc876278f0e41756236f30213b6b460)
+    other path: the-file (node 0000000000000000000000000000000000000000)
+    extra: ancestorlinknode = 9b610631ab29024c5f44af7d2c19658ef8f8f071
+    extra: merge-removal-candidate = yes
+#else
+  $ hg debugmergestate
+  local (working copy): e9b7081317232edce73f7ad5ae0b7807ff5c326a
+  other (merge rev): adfd88e5d7d3d3e22bdd26512991ee64d59c1d8f
   extra: the-file (merge-removal-candidate = yes)
+#endif
 
 (merging a deletion with keeping → conflict)
-BROKEN: this should result in conflict
 
   $ hg update --clean 'desc("merge-keeping-the-file-from-deleted")'
   0 files updated, 0 files merged, 0 files removed, 0 files unresolved
+#if newfilenode
+  $ hg merge          'desc("merge-deleting-the-file-from-updated")'
+  file 'the-file' was deleted in other [merge rev] but was modified in local [working copy].
+  You can use (c)hanged version, (d)elete, or leave (u)nresolved.
+  What do you want to do? u
+  0 files updated, 0 files merged, 0 files removed, 1 files unresolved
+  use 'hg resolve' to retry unresolved file merges or 'hg merge --abort' to abandon
+  [1]
+#else
   $ hg merge          'desc("merge-deleting-the-file-from-updated")'
   0 files updated, 0 files merged, 0 files removed, 0 files unresolved
   (branch merge, don't forget to commit)
+#endif
   $ ls -1
   other-file
   the-file
@@ -886,7 +917,12 @@
   $ hg debugmergestate
   local (working copy): 38a4c3e7cac8c294ecb0a7a85a05464e9836ca78
   other (merge rev): a4e0e44229dc130be2915b92c957c093f8c7ee3e
-  extra: the-file (merge-removal-candidate = yes)
+  file: the-file (state "u")
+    local path: the-file (hash 6d2e02da5a9fe0691363dc6b573845fa271eaa35, flags "")
+    ancestor path: the-file (node 59e363a07dc876278f0e41756236f30213b6b460)
+    other path: the-file (node 0000000000000000000000000000000000000000)
+    extra: ancestorlinknode = 9b610631ab29024c5f44af7d2c19658ef8f8f071
+    extra: merge-removal-candidate = yes
 #else
   $ hg debugmergestate
   local (working copy): e9b7081317232edce73f7ad5ae0b7807ff5c326a