Leaders of the world's largest industrial countries agreed Friday to create a new global fund to combat AIDS and said the right policies are in place to avert a worldwide recession.

The opening of the summit was marred by violent protests, and police reported that one demonstrator was killed.

At a late afternoon news conference, Italian Premier Silvio Berlusconi proudly announced creation of the new global health fund, with initial pledges of support of $1 billion from the United States and other wealthy donors.

"While the global economy has slowed more than expected over the past year, sound economic policies and fundamentals provide a solid foundation for stronger growth," the leaders said in their statement.

It was issued after several hours spent reviewing economic conditions in their respective countries and current trouble spots including Argentina and Turkey. 

The group embraced the tax cut Bush pushed through Congress and the aggressive interest rate cuts by the Federal Reserve. They said the actions set the stage for a rebound in economic growth.

Canadian Prime Minister Jean Chretien said, "It was a good day of work. We reviewed the economy of the world and yes, we are in a slowdown although everyone thinks there won't be a recession."

The leaders also pledged to get personally involved in the effort to launch a new global trade round, hoping to recoup from the failed effort to launch the talks in Seattle in December 1999.