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OTRC: Peter Jackson rolls cameras on 'The Hobbit'

After a series of setbacks, including actors promising to boycott, studio funding issues and Peter Jackson undergoing surgery for an ulcer, filming of "The Hobbit" has begun in New Zealand, according to the Associated Press.

'The Hobbit' will be two films and will star British actor Martin Freeman of "The Hitchhikers Guide to the Galaxy" as hobbit Bilbo Baggins. The films will serve as a prequel to "The Lord of the Rings" trilogy written by J.R.R. Tolkien that Jackson helmed to blockbuster film success.

Jackson is bringing back many familiar faces from the "Rings" franchise including Elijah Wood, Cate Blanchett and Ian Mckellen. The actors are set to reprise their roles from the previous franchise.

Other actors cast in the movie include Ken Stott as Dwarf Lord Balin, Sylvester McCoy as Radagast the Brown, and Mikael Persbrandt as Beorn.

"The Hobbit" production has experienced a substantial amount of production problems, the biggest of which was a dispute with actor's unions in New Zealand, Peter Jackson's homeland and the filming location of the original "Lord of the Rings" trilogy.

The government of New Zealand struck a $25 million deal with Warner Bros., in October in order to keep the film from relocating to another country. In addition, the government also promised labor law changes.

The country was in danger of having the film, worth an estimated $500 million move its production to another country after unions called for a world boycott of it over salary and working conditions. The boycott was later called off. Jackson has had to deny his production company underpaid actors.

It was announced in October the two "Hobbit" films are set for release in December 2012 and December 2013.

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