A year after its first rally in Dresden, a Pegida anti-Islam protest on Monday drew up to 20,000 people to the city once again in protest at immigration laws.

"Welcome to the first anniversary of Pegida. I have goosebumps," founder and leader Lutz Bachmann said to a cheering audience, according to Germany's The Local.

"Politicians attack and defame us and the lowest tricks are used to keep our mouths shut. We are threatened with death, there are attacks on our vehicles and houses and we are dragged through the mud, but we are still here...And we will triumph!"

The demonstration began outside the Semperoper opera house. Protestors waved German and Confederate flags and sang the national anthem. Posters bore slogans such as "Hell comes with fake refugees" and "Every people should have its country, not every people a piece of Germany".

Supporters of Pegida (Patriotic Europeans Against the Islamisation of the West) are calling for Europe to be protected from what they see as "Islamisation" by Muslim immigrants.

The movement gained huge support when it first began a year ago, with a peak of around 25,000 people at its weekly rallies in January, and demonstrations spread throughout Europe. Though support then waned, Pegida has seen a surge of popularity in response to the influx of refugees into Germany over recent months.

Germany is implementing Chancellor Angela Merkel's decision to accept refugees that could number more than a million this year. She argues that the country can not only cope but, with its ageing population, will benefit in the long term.

Pegida has been branded 'anti-Islam' and Bachmann was forced to resign in January after reportedly branding asylum-seekers "animals" and "scumbags" and a photo of him posing as Hitler went viral.

Five other Pegida leaders also resigned amid increasing criticism about the group's "racist" agenda. Bachmann, however, was later reinstated.

The movement has been widely condemned. Merkel urged Germans to stay away from "those with hate in their hearts" ahead of yesterday's protest.

"The chancellor has already reacted to such demonstrations in her 2015 New Year's speech, and I would repeat it here as it is unfortunately still valid: 'Don't follow those with hate in their hearts,'" her spokesman said.

Interior Minister Thomas de Maiziere said organisers were "hardcore right-wing extremists" and everyone who attended their demonstrations "should know that they are running after rat catchers". His comments were condemned by Bachmann during the demonstration.

At least one person was seriously injured during the course of the protest, and 14,000 turned up to counter-protest.

The counter-demonstrators marched through the town chanting: "Say it loud, say it clear, refugees are welcome here!"

Simone Peter, leader of the Greens party and one of the counter-demonstrators, told Reuters: "We're for diversity and an open, colourful society, not hatred and violence...the people who incite with right-wing slogans add fuel to the fire of the arsonists."

Additional reporting by Reuters