-The diff above shows the differences between the working-tree version
-of file.txt and two previous versions: one version from HEAD, and one
-from MERGE_HEAD. So instead of preceding each line by a single "+"
-or "-", it now uses two columns: the first column is used for
-differences between the first parent and the working directory copy,
-and the second for differences between the second parent and the
-working directory copy. Thus after resolving the conflict in the
-obvious way, the diff will look like:
+During the merge, the index holds three versions of each file. Each of
+these three "file stages" represents a different version of the file:
+
+-------------------------------------------------
+$ git show :1:file.txt # the file in a common ancestor of both branches
+$ git show :2:file.txt # the version from HEAD, but including any
+ # nonconflicting changes from MERGE_HEAD
+$ git show :3:file.txt # the version from MERGE_HEAD, but including any
+ # nonconflicting changes from HEAD.
+-------------------------------------------------
+
+Since the stage 2 and stage 3 versions have already been updated with
+nonconflicting changes, the only remaining differences between them are
+the important ones; thus gitlink:git-diff[1] can use the information in
+the index to show only those conflicts.
+
+The diff above shows the differences between the working-tree version of
+file.txt and the stage 2 and stage 3 versions. So instead of preceding
+each line by a single "+" or "-", it now uses two columns: the first
+column is used for differences between the first parent and the working
+directory copy, and the second for differences between the second parent
+and the working directory copy. (See the "COMBINED DIFF FORMAT" section
+of gitlink:git-diff-files[1] for a details of the format.)
+
+After resolving the conflict in the obvious way (but before updating the
+index), the diff will look like: