Protesters clashed with police in the German resort town of Garmisch-Partenkirchen on Saturday as thousands demonstrated against a meeting of Group of Seven (G7) leaders that starts on Sunday at a nearby luxury hotel.

Police responded with pepper spray when a group of marchers tried to break through their cordon. Scuffles broke out and at least one protester was carried away by paramedics.

The crowd was estimated by police at 3,600 while organisers put it at 4,500. Police vastly outnumbered the marchers in the picturesque former winter Olympic games venue at the foot of Germany's highest mountain, the Zugspitze.

Playing drums, tambourines and shaking rattles, protesters shouted "Brick by brick, wall by wall stop G7 and make the system fall!". They carried banners reading "Fight G7 for Revolution" and "G7 go to hell! I like Putin".

"I'm protesting because the big financial corporations have too much influence over politics," said Thomas Schmidbauer, 50, from Sindlsdorf in Bavaria, who was dressed in traditional Bavarian lederhosen shorts.

"Poverty isn't being tackled. It is unfair. We could organise our economies much better for the people," he added.

Tom Klappert, a 31-year-old medical student, said: "It's not acceptable that they're throwing so much money at a conference while so many refugees and other people are dying of hunger every day."

Some 17,000 German police have been deployed around the summit site in the Bavarian Alps and another 2,000 Austrian police were on standby across the nearby border.

German Chancellor Angela Merkel will welcome the leaders of Britain, Canada, France, Italy, Japan, the United States and the European Union on Sunday at a meeting expected to focus on issues like climate change, the fight against pandemics, Middle East turmoil and an upsurge of violence in Ukraine.

They are also due to discuss the world economic recovery and officials said Greece's unresolved debt standoff with its IMF and euro zone creditors, which is weighing on financial markets, would figure on the sidelines.

This will be the second summit of industrial nations to exclude Russia, frozen out of the G8 following its annexation of Ukraine's Crimea region last year.

Rainer Lipfert, 71, wearing a red t-shirt saying "Putin sympathiser", said excluding Russian President Vladimir Putin would only escalate the conflict.

"We're seeing the beginning of a Cold War now with both sides rattling their sabres," he said.

Merkel spoke to Ukrainian President Petro Poroshenko before the G7 summit and they called for all sides to respect a ceasefire in eastern Ukraine after the latest flare-up blamed by European observers on Russian-backed separatists, a German government spokeswoman said.