How do I configure Araxis Merge for use with Git?

Git now uses the Araxis compare utility directly, rather than araxisgitdiff and araxisgitmerge, so all that's needed is to set the path to

/Applications/Araxis Merge.app/Contents/Utilities/compare

for example, by executing

git config --global mergetool.araxis.path '/Applications/Araxis Merge.app/Contents/Utilities/compare'

or by directly editing ~/.gitconfig to contain

[mergetool "araxis"]
     path = /Applications/Araxis Merge.app/Contents/Utilities/compare

Make sure you are running git version 1.6.4 or above. Copy these utilities from the Utilities folder in the Araxis Merge install image to /usr/local/bin.

araxisgitmerge
araxisopendiff
compare
compare2

Then edit ~/.gitconfig and add these lines:

[diff]
    tool = araxis
[merge]
    tool = araxis

The next time you type git mergetool it should launch the Araxis Merge graphical tool.

This information was taken from the official Araxis documentation here.

Hard to make sense of the thread here, so I'm pasting below the exact .gitconfig that worked for me:

[diff]
tool = araxis

[merge]
tool = araxis

[mergetool "araxis"]
        path = /Applications/Araxis Merge.app/Contents/Utilities/compare