Must a default XML Sequence (or All) with optional child elements have at least one child?

I would be grateful if someone could confirm if the interpretation of the following schema is correct:

<xs:element name="Element1">
    <xs:complexType>
        <xs:sequence>
            <xs:element name="Child1" minOccurs="0" />
            <xs:element name="Child2" minOccurs="0" /> 
        </xs:sequence>
    </xs:complexType>
</xs:element>

Although both Child1 and Child2 are optional, Element1 has to have at least one child to comply with the above schema; i.e. the document:

<Element1></Element1>

Would not comply. For this to be valid, it would require sequence minOccurs = 0(?)

Update

The question relates to the meaning of occurrence for sequence (and all) when child elements are optional. For example, the document;

<Element1>
    <Child2/>
    <Child1/>
</Element1>

Would comply with the above schema. The sequence would have occurred twice; in the first pass, Child1 was absent. In the second, Child2 was absent. But the point is, the sequence minOccurs (default of 1) was satisfied, because it occurred twice.

With the first example I gave above (just Element1; no child elements), sequence does not occur at all, and does not (IMO) satisfy minOccurs = 1.

Solution

Must a default XML Sequence (or All) with optional child elements have at least one child?

No...

Although both Child1 and Child2 are optional, Element1 has to have at least one child to comply with the above schema

The default value for minOccurs is 1, so you're correct to assume that the xsd:sequence is constrained to appear once. However, xsd:sequence minOccurs="1" is satisfied as long as its children's occurrence constraints are satisfied once. When all child occurrence constraints are minOccurs="0", one empty sequence is allowed. Therefore, <Element1/> is valid, even without any Child1 or Child2 children elements.

See also

Further examples:

XSD with xs:sequence minOccurs="0"

<xs:element name="r">
    <xs:complexType>
        <xs:sequence minOccurs="0" maxOccurs="1">
            <xs:element name="a"/>
            <xs:element name="b"/> 
        </xs:sequence>
    </xs:complexType>
</xs:element>

Valid XML: <r/> and <r><a/><b/></r>

XSD with xs:sequence minOccurs="1" (default)

<xs:element name="r">
    <xs:complexType>
        <xs:sequence minOccurs="1" maxOccurs="1">
            <xs:element name="a"/>
            <xs:element name="b"/> 
        </xs:sequence>
    </xs:complexType>
</xs:element>

Valid XML: <r><a/><b/></r>

XSD with xs:sequence minOccurs="2"

<xs:element name="r">
    <xs:complexType>
        <xs:sequence minOccurs="2" maxOccurs="2">
            <xs:element name="a"/>
            <xs:element name="b"/> 
        </xs:sequence>
    </xs:complexType>
</xs:element>

Valid XML: <r><a/><b/><a/><b/></r>