Dresden police said that around 17,300 people participated in the rally of the "Patriotic Europeans against the Islamization of the West," or PEGIDA. Organizers claimed more than 25 thousand people attended.
The rally showed continued support for the right-wing group in Dresden despite growing suspicion in public opinion about the actions of its leaders.
PEGIDA's founder Lutz Bachmann announced his resignation on Wednesday amid a row over a photo he posted on Facebook in which he was dressed as Adolf Hitler.
Bachmann claimed the photo was a joke, but Dresden's public prosecutor opened a hate crime probe into the former leader's Facebook posts.
Police took heavy security measures in Dresden on Sunday and tried to prevent clashes between PEGIDA supporters and leftist groups which also held counter-demonstrations in the city. Around 5 thousand activists attended the demonstration against xenophobia and exclusion of immigrants. No major incidents were reported.
PEGIDA held its largest rally on Jan 12, in the aftermath of the terrorist attack on satirical magazine Charlie Hebdo in Paris that killed 12 people.
It cancelled a planned demonstration in Dresden on Jan 19, due to what its organizers said was a substantial "terrorism threat."
The right-populist group usually holds rallies every Monday, but organizers said their intention with changing the date this week was to prevent clashes with opponents and left-wing protestors, who called for a major rally on Monday.
PEGIDA started weekly protests in Dresden with around 500 demonstrators, but significantly increased its support base within three months.
It has inspired several copycat groups in other major German cities, like KOEGIDA in Cologne, HAGIDA in Hamburg and BAERGIDA in Berlin. But unlike PEGIDA, none of these groups could draw crowds more than 5 thousand.
PEGIDA’s stronghold Dresden is the capital of the state of Saxony, which was part of the former communist Eastern Germany between 1949 and 1989.
High level of unemployment and poverty remain a serious problem in the state, 25 years after the unification of Western Germany and Eastern Germany.
Germany’s far-right National Democratic Party of Germany, or NPD, gained 4.95 percent of the vote in the state elections in Saxony in 2014. Germany’s recently founded anti-Euro, right populist Alternative for Germany, or AfD, received 9.7 percent of the vote and gained 14 seats at the state parliament.
Germany is home to four million Muslims and 98 percent of them live in the states of Western Germany. In Saxony, where anti-Islam movements drew strong support, only 0.7 percent of the population is Muslim.
Germany has witnessed an increase in suspicion and negative feelings towards Muslims in recent months as far right and right populist parties have sought to benefit from a growing fear of Islam, which was largely influenced by reports of murders and atrocities being committed by ISIL in the Middle East.
A recent study by the Bertelsmann Foundation has revealed that 57 percent of Germany’s non-Muslims perceive Islam as a threat -- a rise of four percent since 2012.
