President Bush on Saturday blamed the Islamic militant group Hezbollah and a compliant Syria for the escalating violence in the Middle East, taking a sharper stance than Russian President Vladimir Putin.

Bush held Israel blameless while Putin was critical of Israel's military response.

"The best way to stop the violence is for Hezbollah to lay down its arms and to stop attacking. And therefore I call upon Syria to exert influence over Hezbollah," Bush said about the flare-up that could overshadow this weekend's meeting of world powers.

The U.S. pressed for the Group of Eight's approval of a statement identifying Hezbollah as the main culprit and emphasizing the importance of maintaining a democratic Lebanon.

Israel launched its offensive after Hezbollah guerrillas crossed the Israel-Lebanon border and captured two Israeli soldiers on Wednesday. Since then, Israel has bombarded Lebanon's airport and main roads while Hezbollah, backed by both Syria and Iran, has launched hundreds of rockets into Israel.

Bush blamed Hezbollah's rocket attacks at Israel from its base in southern Lebanon, and the militant group's capture of the two Israeli soldiers for triggering the fierce fighting.

Putin agreed it was unacceptable for Hezbollah to try to achieve its goal by using force and abductions. But Putin said that while Israel's concerns may be justified, "The use of force should be balanced" and should stop.

Later, Russian Defense Minister Sergei Ivanov called the conflict "basically, a war that has begun" and warned that other nations in the region could be drawn into the fight. "Both sides in the conflict must exercise extreme restraint, caution and foresee the consequences of their actions," he told reporters.

The United States, meanwhile, worked behind the scenes to build support for a statement expressly condemning Hezbollah for its role. The statement would also criticize Syria, Iran, and the Palestinian group Hamas for "all acting in a way that frustrates democracy in the area and frustrates peace," said Bush's National Security Adviser Stephen Hadley. It would assert the importance of maintaining democracy in Lebanon and salute efforts of the United Nations to restore peace.

Bush and Putin spoke at a news conference just hours after the breakdown of talks to bring Russia into the World Trade Organization, a long-sought goal of Putin's. He had hoped to announce an agreement on the WTO before hosting the G-8 summit. Susan Schwab, the top U.S. trade negotiator, later told reporters that reaching a deal could take another two to three months.

The talks broke off because of differences over assurances the United States was seeking over the protection of U.S. copyrights and patents and promises that Russia would accept greater amounts of U.S. farm goods.

Bush said the administration believed Russia needed to offer more in trade concessions to satisfy the Congress. He said both sides would continue to negotiate to get a deal. The United States is the only country that has yet to signoff on Russia's membership in the WTO.

The two leaders aren't in complete agreement either on democracy. Russia has come under criticism from some Western leaders for backsliding on democracy and exerting greater state control over the oil industry.

Bush emphasized the importance of individual rights and freedoms. "I fully understand that there will be a Russian style democracy. I don't expect Russia to look like the United States," Bush said. "As Vladimir pointedly reminded me last night, we have a different history, different traditions."

Putin replied: "We certainly would not want to have the same kind of democracy as they have in Iraq, I can tell you quite honestly." It was a reference to the U.S.-led invasion of Iraq, which Putin opposed, and the U.S. imposition of democracy there.

"We know for sure that we cannot strengthen or nation without developing democratic institutions," Putin said. "But, certainly, we will do this by ourselves." The leaders were able to agree on an initiative to combat nuclear terrorism. The Global Initiative to Combat Nuclear Terrorism calls on states to improve accounting, control and physical protection of nuclear material and radioactive substances as well as the security of nuclear facilities. The agreement pledges joint efforts to detect and suppress illicit trafficking in nuclear, biological and chemical materials — particularly measures to prevent their acquisition and use by terrorists.

Bush and Putin, who casually called each other by their first names, sought to downplay U.S.-Russia tensions.

Besides the newest Middle East crisis, Bush and Putin discuss ways to deal with the nuclear ambitions of Iran and North Korea.

The United States and Japan insisted that the U.N. Security Council vote Saturday on a proposed resolution condemning North Korea's missile tests. A last-minute proposal brought the divided council closer to an agreement, but the council remains split over one final issue: Should the resolution be adopted under Chapter 7 of the U.N. Charter, which allows for the use of military force to make sure the resolution is obeyed.

"I'm confident that we can get something done at the United Nations on North Korea," Bush said.

Bush said he and Putin agree that Iran should not have nuclear weapons, but Bush declined to say whether he asked Putin to back U.N. sanctions against Tehran to force Iran to abandon uranium enrichment — a process that can lead to the production of nuclear weapons.

"If the Iranians see that the United States and Russia are working together, they will see the seriousness of our intent," Putin said.