  A variational formulation for the calculation of interacting fermion systems
based on the density-matrix functional theory is presented. Our formalism
provides for a natural integration of explicit many-particle effects into
standard density-functional-theory based calculations and it avoids ambiguities
of double-counting terms inherent to other approaches. Like the dynamical
mean-field theory, we employ a local approximation for explicit correlations.
Aiming at the ground state only, trade some of the complexity of Green's
function based many-particle methods against efficiency. Using short Hubbard
chains as test systems we demonstrate that the method captures ground state
properties, such as left-right-correlation, beyond those accessible by
mean-field theories.
