Subject Merge in Fb3 fails


I thought this working in Fb 2.5, but maybe not.

I have a zipcode table with multiples of some zipcodes. it gets updated occasionally with brand new zipcodes.

I want to merge it into a ref table with unique zipcodes.The code without merge works:

insert into ZipCodeRef (ZipCode, Longitude, Latitude)
 select distinct T2.ZipCode, T2.Longitude, T2.Latitude
 from ZipCodeDataBus T2
 where not exists

(select first 1 ZipCodeRef.Zipcode from ZipCodeRef where T2.ZipCode=ZipCodeRef.ZipCode)
 and T2.ZipCode <> '00000';

Above works. Merge below fails:

merge into ZipCodeRef T1  

using ZipCodeDataBus T2  

on T2.ZipCode = T1.ZipCode   
when not matched then    

insert (ZipCode, Longitude, Latitude) values (T2.ZipCode, T2.Longitude, T2.Latitude);

Message: isc_dsql_execute2 failed
SQL Message : -803
can't format message 13:197 -- message file C:\WINDOWS\SYSTEM32\firebird.msg not found
Engine Code    : 335544665
Engine Message :
violation of PRIMARY or UNIQUE KEY constraint "UKZIPCODEREF_ZIPCODE" on table "ZIPCODEREF"
Problematic key value is ("ZIPCODE" = '00501')

in the source table there are multiple instances of zipcode '00501'. After the first insert,I would expect a match to be found, and the subsequent insert to be avoided.

Is there something wrong with my SQL?