Security has been stepped up in the Swiss ski resort of Davos after hundreds of protesters attempted to disrupt the World Economic Forum.

More than 500 people opposed to the effects of global capitalism defied a ban on demonstrating outside the annual meeting attended by international leaders.

Waving banners bearing captions such as "Yankee Clinton go home", the protesters mounted their action to coincide with an address by the US president on Saturday.

The protesters broke windows at a McDonald's restaurant and vandalised several cars.

Others burned an American flag pulled from the facade of a luxury hotel where most of the world leaders are staying, and used police barricades to try to break the hotel's windows.

As the protesters marched up the main street hurling snowballs and ski sticks, police fired warning shots and then tear gas.

Two police officers were injured, although not seriously, and two people were arrested.

Tense stand-off

Hundreds of police officers were stationed throughout the village for Mr Clinton's visit, and the army was called in for back-up.

Correspondents said Swiss police surrendered control of some areas of the town to the protesters, and instead sealed off the area around the conference venue.

Mr Clinton told delegates that such demonstrations showed some people felt politicians were ignoring social issues in the bid to free up world trade.

"That's why people are in the streets. They don't have any place to come in and say 'here's what I think and here's the contribution I have, here's the beef I have - how are we going to work this out?'" Mr Clinton said.

World trade 'undemocratic'

World trade protesters have a range of complaints, but those in Davos have expressed similar views to the demonstrators who disrupted the World Trade Organisation meetings in Seattle in December.

They say world trade is undemocratic and driven only by a desire to maximise profits, at the expense of environmental and other concerns.

There are also worries about the effects of globalisation on developing countries.