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Germany has been celebrating the 20th anniversary of its reunification.

Chancellor Angela Merkel led the official celebrations, hosted by the northern city of Bremen and attended by tens of thousands of people.

Capitalist West and communist East Germany merged on 3 October 1990, nearly a year after the fall of the Berlin Wall which divided them.

Sunday is also the day Germany makes the last payment on debt stemming from reparations imposed after World War I.

Mrs Merkel was joined by many leading German and international figures in Bremen to mark one of the 20th Century's historical turning points.

German President Christian Wulff told the assembled dignitaries: "We remember the momentous day that a people experience only rarely. I bow before everyone who fought for freedom... your courage moved the world."

He called for a "new solidarity" that encompassed Christianity, Judaism and Islam.

"We must not allow the cementing of prejudice and exclusion," he said.

On the eve of the anniversary, US President Barack Obama passed on his congratulations and said Germany was "one of our closest allies and greatest friends".

He said the US honoured "the courage and conviction of the German people that brought down the Berlin Wall, ending decades of painful and artificial separation".

Mrs Merkel, who was brought up in the East, praised former East Germans for fighting for their freedom.

She added: "At the same time, there was a huge wave of solidarity from the people in West Germany. It is thanks to these joint efforts that we have been able to rebuild so quickly and make Germany a country that is respected in the world."

Since the two countries became one, more than 1.5 million people have migrated west.

The ´óÏó´«Ã½'s Stephen Evans in Berlin says opinion polls show some unhappiness in the west about the so-called "solidarity tax" on incomes to pay for eastern reconstruction but on both sides of the country the polls indicate a big majority in favour of a united Germany.

However, not everyone welcomed the reunification festivities.

Thousands of police were deployed in Bremen on Saturday as some 1,800 mainly left-wing activists marched through the city in protest. The demonstration passed off peacefully.

Sunday also marks the final day of German reparations for World War I.

A last payment of 70 million euros (£60m) will draw the debt to a close.

In 1919, the victorious allies wanted to ensure Germany would not be capable of war for many years and set reparations at the equivalent of 100,000 tonnes of gold.

But the plan backfired, with modern-day historians claiming the decision was a key factor in the lead-up to World War II.