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Earlier, Spanish police arrested a Mexican student for allegedly plotting to gas the anti-Pope rallies.
The trip comes at a time of economic hardship in Spain, although organisers say the pilgrimage is self-funded.
Up to a million pilgrims from across the world have gathered in the city for the six-day World Youth Day (WYD 2011) festival, which culminates with an open-air mass on Sunday celebrated by Pope Benedict XVI.
The Pope will arrive at Madrid's Barajas airport on Thursday morning and hold meetings with young people at WYD 2011 later in the day.
'Clashes' More than 100 groups opposed to the Pope's visit planned to protest on Wednesday evening.
They include those who belong to the 15-M "indignant" movement - who oppose the government's austerity drive - as well as gay rights groups and others who oppose aspects of Catholic teaching.
"We are not angry about the Pope's visit, which some will agree with and others won't, but rather over the financing of it with public money, especially at a time when many services are being cut because it's necessary to curb government spending," 15-M said in a statement.
Protesters walked into the old city centre shouting "Nothing for the Pope from my taxes".
"It is costing a lot of money for the Spanish state which is going through a bad period," one protester, 55-year-old Rosa Vazquez, told Reuters news agency.
The BBC's Sarah Rainsford in Madrid said tension increased as the protest attempted to cross Sol square, the site - and symbol - of months of mass protests against unemployment and austerity.
When police tried to clear the square, officers in riot gear clashed with demonstrators - some of them throwing bottles and water.Spain is going through its worst economic crisis in decades, with its 21% unemployment rate in the highest in the EU.
Organisers say they believe the event will generate about 100m euros (£88m; $144m) for the Spanish economy "at zero cost to taxpayers", but critics estimate the event will cost a similar sum.
The government has declined to give a figure for the costs, according to Reuters.
'Chemical attack planned' On Wednesday, Spanish police said they had apprehended a Mexican chemistry student who had planned to attack an anti-Pope march with "asphyxiating gases and other chemical substances".
Officers searched his apartment seized an external hard-drive and two notebooks with chemical equations not related to his studies at his apartment, police said.
The WYD 2011 festival began on Tuesday evening with a giant open-air Mass where about 800 bishops, archbishops and cardinals from around the world and 8,000 priests tended to the congregation, AFP news agency reports.
Hiroshi Niwuya, a 22-year-old Japanese student, said: "I really wanted to come here for the Pope because there are few Christians in Japan and I wanted to be surrounded by others who share my faith."
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