Berlin (AFP) - Thousands of people joined a march by the German anti-Islamisation PEGIDA movement on Sunday, the group's first rally since threats surfaced against the group and its leader resigned over "Hitler" photos.

The new demonstration in Dresden came after Foreign Minister Frank-Walter Steinmeier voiced concern that the group's anti-Muslim sentiments were harming Germany's image.

Police estimated that 17,000 people had turned up for the rally.

Many carried signs saying "They don't do anything, they move here and they deal", "For a sovereign country", "Honest people, get up at last" and "Thank you Pegida".

There were also chants of "We are the people", a reference to the spontaneous movements that preceded the fall of the Berlin Wall in 1989.

Sunday's rally was the first since PEGIDA's founder and leader Lutz Bachmann stepped down on January 21 after a photo of him with a Hitler-style haircut and moustache appeared on Facebook, along with racist slurs.

It was also the first since a rally was cancelled in Dresden after threats were made against Bachmann and other leaders of the self-styled "Patriotic Europeans Against the Islamisation of the Occident".

PEGIDA marches -- which have voiced anger against Islam and "criminal asylum seekers" -- began with several hundred supporters in October and have since steadily grown, drawing a record 25,000 people on January 12 just after the Paris Islamist attacks.

"We are not against Muslims who want to work in Germany, we are not neo-Nazis. But those who want to live in Germany should adapt to the reality of the country," 57-year-old Gabriele Schoenherr told AFP at the rally.

Steinmeier said Germany underestimates the damage caused by "PEGIDA's xenophobic and racist slogans and placards".

International scrutiny makes "it all the more important that we say clearly and strongly that PEGIDA does not speak in Germany's name," he said in an interview with daily newspaper Bild.

He also said that mobilising crowds with attacks on scapegoats like immigrants and asylum seekers was "easier than by (raising) complex subjects like insufficient infrastructure or the ageing of the population."

The movement has also prompted anti-PEGIDA protests in Germany.

On Saturday, Aiman Mazyek, chairman of the Central Council of Muslims, condemned the increasing Islamaphobic attacks in Germany, including "insults" against veiled women, mosques "vandalised" and violence against imams.