U.S. President Barack Obama has welcomed German Chancellor Angela Merkel to Washington, where the two leaders are set to discuss their differences over economic policy and the war in Libya.

President Obama is honoring Ms. Merkel with all the pomp and ceremony of an official visit, including an elaborate arrival ceremony Tuesday that featured a live band playing both countries' national anthems. But the more serious issues, especially those that have divided the two nations in recent months, are likely to draw the most attention.

The two leaders are set to discuss NATO operations in Libya, a project Germany has not supported. Officials say Mr. Obama and Ms. Merkel also are likely to touch on the global economy, the Eurozone debt crisis, the Middle East peace process and Afghanistan.

Speaking at Tuesday's ceremony, President Obama called Ms. Merkel one of his “closest global partners.”

Also attending the ceremony were first lady Michelle Obama and Vice President Joe Biden and his wife, Jill.

Mr. Obama will present Ms. Merkel with the U.S. Medal of Freedom, the country's highest civilian honor, later Tuesday at a formal state dinner.

President Obama and Chancellor Merkel dined Monday at an elegant restaurant in Washington's historic Georgetown neighborhood.

Her visit comes as Germany struggles with an outbreak of E. coli that has killed at least 22 people and sickened some 2,200 others.

On Monday, Germany's Cabinet approved a plan to phase out the country's nuclear plants by 2022, becoming the first major industrial power to give up atomic power and rely entirely on other sources of energy.

Ms. Merkel is Germany's first female chancellor.