Protesters have clashed with police in the German town of Garmisch-Partenkirchen, 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 first broke out as the demonstrators, some throwing bottles, faced off with riot police.

One paramedic said several protesters were taken to hospital and he was aware of around 30 people with minor injuries.

A police spokeswoman could not give any official figures on casualties nor say whether there had been any arrests.

The crowd was estimated by police at 3,500 to 4,000, while organisers put it at 7,500.

Police vastly outnumbered the marchers, with some 17,000 German police around the summit site and another 2,000 Austrian police on standby across the nearby border.

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.

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

The protest began in scorching heat but as it drew to a close a thunderstorm drenched the demonstrators and threatened to wash out their camp.

The crowd of protesters was estimated by police at 3,500-4,000. ( Reuters: Wolfgang Rattay )

Excluding Putin to 'escalate conflict'

German chancellor Angela Merkel will welcome the leaders of Britain, Canada, France, Italy, Japan, the United States and the European Union today 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 International Monetary Fund and Eurozone creditors 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.

Ms 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, a German government spokeswoman said.

Reuters