Pittsburgh hung banners, swept streets and gussied up its downtown in preparation for an economic summit of world leaders that augurs high drama both diplomatically and on the streets outside.

French President Nicolas Sarkozy has threatened a walkout if the Group of 20 world leaders and central bankers don't do enough to curtail massive pay bonuses for financial leaders amid a global economic meltdown.

Protesters, skeptical of any central planning by leaders they see as beholden to corporations, hinted at disruptions throughout the city to dramatize their opposition to the global free markets that the G-20 embodies.

With much of the work done long in advance, in offices from Tokyo to Buenos Aires, experts say the gathering is likely to involve fine-tuning, hint-dropping and, perhaps, a little ego-massaging.

"There is some theater to it. On the other hand, much of the work is done ahead of time by staff," said Mickey Kantor, the former U.S. Trade Representative under President Bill Clinton.

The theatrics can be subtle, as the Chinese delegation angles for greater say in the running of the International Monetary Fund and World Bank, the two financial arms of global economic diplomacy. Too, they can take on spectacular atmospherics, with thousands of protesters flooding streets, blocking intersections and, in extreme cases authorities hope to avoid here, battling riot-helmeted police.

"Our goal is to avoid conflict. Our goal is to have a peaceful event and our officers have been trained accordingly," said Mayor Luke Ravenstahl.

The mayor, who eagerly courted the White House when it made overtures to the city as a site for the G-20, hopes to present Pittsburgh as a reinvented city that has shed its image of heavy industrial grime and become a showplace for modern commerce.

"A great opportunity for us to kind of reintroduce ourselves," he said.

The goal, the mayor acknowledged, is to straddle the showcase aspects of the event while containing threatened disruptions from leftist groups opposed to the meeting.

One federal source, citing internal documents, said protest groups have been kept under watch and that investigators expect some efforts to block traffic. At the same time, anarchist leaders have ramped up plans for an unauthorized march from Arsenal Park in Lawrenceville into Downtown on the opening day of the summit.

Each side is suggesting the other is setting the stage for confrontation.

Both Mayor Ravenstahl and Public Safety Director Michael Huss say police will show restraint but won't tolerate broken laws.

"We're going to allow for peaceful demonstrations. We're not going to tolerate people breaking the law," said Mr. Huss. "We're going to take a common-sense approach to this."

One spokesman for the Pittsburgh G-20 Resistance Project, a coalition of anarchist groups seeking to disrupt the event, framed their position this week as a defensive one.

"We are residents of Pittsburgh. What we're here to do is to defend our community. This is where we live. This is where we work," said the spokesman, who gave his name as Noah Williams, of Bloomfield.

Mr. Williams said the G-20 "represents violence against workers, violence against the poor, violence against the global South. A violent assault on the dignity of our future."

Another anarchist leader, Alex Bradley, this week suggested that police might attack the demonstrators early in the march. Police officials say their only plan is to allow peaceful demonstrations and arrest those breaking the law.

Federal authorities also are worried about "affinity actions" -- disruption at various corporate targets in other cities, including New York -- to coincide with Pittsburgh demonstrations.

With a lengthy schedule of street theater, tent cities and counter meetings outside the David L. Lawrence Convention Center, the agenda for the G-20 itself has seemed somewhat obscure.

Essentially, the gathering, the third of its kind, will put the leaders of 19 countries and the European Union in the same room to discuss how to right a world economy that spiraled into chaos a year ago amid credit crises, bank failures and the collapse of stock and portfolio values that reached from the sub-prime mortgage market to blue chip stocks.

In an April meeting in London, world leaders agreed to buttress their own economies using government spending as a stimulus to encourage investment. They also agreed to seek a framework that would, say experts in global economics, establish oversight on the world economy and the flow of capital across international borders.

The questions surrounding international finance have spawned several spinoff gatherings, from a left-of-center Peoples Summit organized by some academics, to a meeting Wednesday at Carnegie Mellon University to explore the complexities of the political and economic issues that go on the table Thursday afternoon.

One major development emerged last week when Mr. Sarkozy insisted that the body take some action to cap or otherwise significantly reduce executive bonuses in the financial sector. His argument, echoed by other European leaders, came out of the belief that many of the riskiest investments in the American financial sector were spurred by executives seeking hefty bonuses hinged to quick, temporary profits that later soured and dragged down the market with them.

"The structure of the compensation shouldn't be an incentive to take and consider risks and to threaten the stability of the system," said Emmanuel Lenain, a French diplomat who will be among those attending the G-20 meeting. "Everyone acknowledges that after what went on a year ago, we can't just go along and come back to the previous situation without adapting a few things."

The question, Mr. Lenain said, would be "the mechanism" by which to regulate.

Last week, the Federal Reserve signaled that it plans to impose limitations on such bonuses.

But G-20 leaders meeting in London indicated that they are seeking to assign such regulatory powers to the International Monetary Fund, a body that heretofore was employed as a source of emergency funding to analyze and steady shaking economies.

That proposal, while intriguing to many of the leaders, has some skeptics.

"I think the IMF has a ways to go before it's ready to do that," said Alexei Monsarrat, director of the Global Business and Economics Program at the Atlantic Council, a Pittsburgh-based global think tank.

The roadblock to employing the IMF as a watchdog agency, he said, is the potential for political troubles. Created after World War II as an agency to provide short-term loans and funding to troubled economies, the IMF board comprises several industrial nations whose votes on it are weighted to their respective Gross Domestic Products.

Some observers say that this week's G-20 meeting could presage the creation of yet another group or agency, essentially a reconfiguration of the major players in the world economy.

China, for instance, one of the largest holders of American credit, has begun to press for a greater say in the operation of the IMF.

Too, Brazil and India are seeking greater roles in decisions once the province of the G-7, the bloc of nations comprising the United States, Canada, Britain, Italy, France, Japan and Germany.

"Nobody has taken G-20 meetings yet seriously enough as the locus of the big decisions," said Rawi Abdelal, a professor of international business at Harvard and the author of "Capital Rules," a groundbreaking book on the development of global capital markets.

Mr. Abdelal, while saying "the right geometry" of a new power bloc to set the agenda for international economics has not emerged, the current G-7 nations are likely to see their influence shift to emerging nations that, increasingly, hold large debt reserves for industrial nations in the west.

The G-7, he said, "is an architecture that represents the balance of power from the 1960s and 1970s. It doesn't represent the current balance of power in the world."