Using p4merge as Git mergetool on Mac OS X. Do not use TABs for indentation.

.gitconfig

[merge]
        keepBackup = false
        tool = custom
        
[mergetool "custom"]
        cmd = /Applications/development/p4merge.app/Contents/Resources/launchp4merge "$PWD/$REMOTE" "$PWD/$BASE" "$PWD/$LOCAL" "$PWD/$MERGED"
        keepTemporaries = false
        trustExitCode = false
        keepBackup = false