Clashes between Italian police and anti-capitalist demonstrators at the G8 summit in Genoa have left one person dead and another seriously injured.

Clashes between the authorities and protestors began on Friday afternoon, with running battles between rioters and police. Fires were started and shops looted while police responded with tear gas and the heavy use of batons.

On Saturday truncheons rained down on protesters are the police struggled to maintain order on the streets of Genoa.

With leaders of the worlds richest countries gathered in Genoa for their 28th summit, Italian police are continuing to mount a huge security operation to keep the tens of thousands of protestors away from visiting dignitaries.

An estimated 20,000 police officers are sealing off the old city in an attempt to ensure the meetings go ahead uninterrupted. However, with media attention focussed more on the demonstrators than on the leaders themselves, the protestors will already count their presence a success.

While the protestors say that free trade and economic liberalisation are helping western multi-national businesses while hitting the world's poorest countries, the leaders are making efforts to disprove their case. They have invited representatives of developing countries to attend and on Friday evening UN secretary general Kofi Annan announced the creation of a $1 billion health fund, with the money spent on combating Aids, TB and malaria.

Speaking in Britain before he left to attend the summit, US president George W Bush has already said he is looking forward to making the case for free trade. He told the demonstrators: "You embrace policies that lock poor people into poverty. Trade has been the best avenue for economic growth for all countries."

Hosted by controversial Italian businessman and recently elected prime minister, Silvio Berlusconi, the key items on the agenda include growth in the world economy, preventing future economic crisis and extending free trade to help developing countries.

However, the meetings are likely to see a number of trans-Atlantic disputes given a series of moves by the Bush administration that have caused dismay in European capitals.

With European leaders committed to the Kyoto treaty's reduction in greenhouse gasses, and the Japanese government likely to support it after concessions on the use of "carbon sinks" to reduce the cost to their industry, America's rejection of the agreement will come under fire.

With the key players of America, Russia and European leaders all present, America's missile defence plans will also be a hot topic. The US is threatening to unilaterally pull out of the 1972 Anti-Ballistic Missile Treaty which prohibits it from fully developing its systems.

Bush has offered a coherent justification for his plans, arguing on Thursday that "imaginative" thinking was necessary to ensure national safety since the end of the Cold War. He said the 1972 Treaty codified a situation where the world was divided into two armed camps. "Russia is not an enemy," said Bush.

However, Russia has criticised America's latest testing of its missile defence programme and the French and German government's are critical of plans which they fear could lead to a renewed arms race, especially in Asia and on Indian sub-continent. The Italian government has offered some support for America's plans and Britain is likely to seek common ground between the two positions, encouraging continued dialogue over global security.

The global economy will also be a key item for discussion. With America's "Tech bubble" having burst and its economy slowing and the Japanese economy remaining in the doldrums as the government comes under pressure to introduce radical reforms, there will be pressure on the European government's to act to boost growth.

But with the European Central Bank apparently more concerned with keeping a lid on inflation than acting to encourage growth any further, the possibilities for agreeing a common course of action are limited.

However, agreement is likely in other areas, such as acting against money laundering and helping developing countries combat the spread of HIV/Aids, which is causing misery on an almost unprecedented scale across sub-Saharan Africa.

The G8 - A Brief History

The series of meetings began in Rambouillet, France, on November 15 1975. Struggling to get to grips with the on-going oil crisis at that time were the leaders of France, the United States, Britain, Germany, Japan and Italy. As the idea of formal discussions between the major economic powers gained ground, the annual meetings to discuss the main political and economic issues of the time became a reality.

In June 1976, at the second meeting in San Juan, USA, Canada became the newest of the attending nations and the meetings became the G7. The G7 remained unchanged throughout the rest of the 1970's and '80's, with the leaders usually coordinating the diaries to meet in June or July in places ranging from Okinawa, Japan, to Birmingham, England.

From 1994 the G7 began including Russia in their discussions, in what was called the P8, a group of eight political nations. The G7 nations would begin the summit without Russia's participation, but the country would join the meetings at the conclusion of each summit. Russia's full participation in the economic discussions then began at the 1997 Denver summit and became complete the following year in Birmingham.

Issues on the agenda have gradually risen in number as new concerns to international financial stability have been raised. They have broadened to include international business, relations with developing nations, the environment, organised crime, terrorism and arms proliferation.