Leaders from the Group of Seven (G7) industrial nations hold a working dinner in the Bavarian village of Kruen, Germany June 7, 2015. [Photo/Agencies]

BERLIN - The summit of the Group of Seven (G7) industrialized countries has kicked off Sunday in southern Germany amid a heavy police presence and anti-G7 demonstrations.

Before the official start of the summit meetings, German Chancellor Angela Merkel welcomed US President Barack Obama in a small village close to the luxury G7 venue of Schloss Elmau with a traditional Bavarian breakfast.

In their short addresses to local residents, both Merkel and Obama stressed the friendship between Germany and the United States.

"Although we have some differences of opinion, the United States of America is our friend and a vital partner with whom we cooperate closely because it's in our mutual interest," she said.

For his part, Obama hailed US-German ties and the "lasting friendship" between the German and the American people.

Merkel also welcomed other leaders of the G7 group ahead of the start of their talks. The Heads of State and Government, as well as leaders from the European Union, have held two working sessions on the first day of the summit, discussing issues from regulation and supervision of financial markets, combat against tax avoidance and evasion to free trade agreements and international standards in supply chains.

Germany is hosting the leaders of Canada, France, Germany, Italy, Japan, Britain and the United States for two days of talks in the German Bavarian alpine town of Garmisch-Partenkirchen. Leaders of the world's leading economies are expected to focus on economic, foreign and security topics as well as global environment and health issues.