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World leaders meet to thrash out recovery plans

The G20 nations convened in the eastern Canadian city of Toronto on the heels of a tough-talking G8 summit, in which the world's major industrialized powers laid down the law to rogue operators Iran and North Korea.

world Updated: Jun 27, 2010 09:47 IST

The leaders of the world's most powerful countries met on Saturday to settle their differences over how to nurse the fragile world economy back to health.

The G20 nations convened in the eastern Canadian city of Toronto on the heels of a tough-talking G8 summit, in which the world's major industrialized powers laid down the law to rogue operators Iran and North Korea.

After the G8 talks the leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States demanded Iran reveal the extent of its nuclear program in transparent talks with the international community.

They condemned North Korea's alleged sneak attack on a South Korean warship, urged Afghanistan to boost efforts to take charge of its security and called on Israel to honor a pledge to loosen its iron grip on Gaza.

When the G8 summit -- held at an exclusive lakeside resort north of Toronto -- was over the leaders flew back here to join leaders from China, South Korea, Indonesia, Mexico and South Africa and others to form the G20.

Various leaders paired off for bilateral chats, before the formal start of two days of wrangling over the conflicting ideas for how to sustain the world's tentative return to economic growth.

US President Barack Obama concentrated on ties with Asia, meeting China's Hu Jintao and assuring his South Korean counterpart Lee Myung-Bak that Washington would stand "foursquare behind" Seoul in its standoff with the north.

Obama said he would step up his drive to agree a free trade agreement with South Korea and would, at Lee's request, delay a plan to reduce the US role in the country's defense in the event of war with Pyongyang.

The US leader also cosied up to China, inviting Hu to make a state visit to Washington. Japan flattered its giant neighbor and one-time rival, with a surprise suggestion that Beijing be invited to the G8 as well as the G20.

"The G8 may think to invite China to G8 summits from time to time in order to encourage China to have an even larger sense of responsibility," Prime Minister Naoto Kan's spokesman told reporters.

Security was tight, and the leaders' arrival in Toronto was marred by clashes between so-called "black bloc" anarchist protesters and vandals, who broke off from a peaceful 10,000-strong protest rally to smash property.

At least three police cars were set ablaze and riot officers arrested 75 people, resorting to tear gas to protect the steel and concrete barricade shielding the downtown conference venue.

Canada spent more than a billion dollars to secure this week's back-to-back G8 and G20 summits, hoping to avoid the serious street battles that have marred most recent gatherings of these global forums.

Thousands of police reinforcements backed by riot officers on horseback and spotter helicopters had been drafted into the city center, much of which is sealed off behind concrete and steel barriers.

Inside the summit venue, battle lines were being drawn up over the economy, with members disagreeing over the balance to be struck between reducing budget deficits and encouraging growth and spending.

"If it sounds like everyone is rushing to the exit it might cause problems," a senior G20 official told AFP, summarizing the concerns of the United States and many emerging powers that Europe's new parsimony could stifle growth.

While most leaders were keen to play down the differences, US Treasury Secretary Timothy Geithner did take a swipe at powers like Germany, Britain and Japan that he fears have moved too quickly towards budget cuts.

"It's fair to say that I don't think that you've seen from those countries yet a set of policies that would, again, give everybody confidence that you're going to see stronger domestic demand growth," he said.

France's President Nicolas Sarkozy stuck up for Europe, and insisted that there was no deep trans-Atlantic rift on the deficit issue.

"I've heard Obama say how important it is to support sustainable policies, including for the United States, he has indicated quite clearly the risk posed 1by deficits and debt," he told reporters.

The summit was due to end Sunday with a joint communique.