Leaders of the world's industrial powers clashed Saturday over the escalating violence in the Middle East even as the summit host, Russian President Vladimir Putin pledged, "We will find common ground on this."
The leaders opened the summit — the first in Russia — with a dinner at the opulent 18th century Peterhof Palace, which was extensively damaged during World War II and then painstakingly rebuilt. Formal talks were to begin Sunday at a second palace that doubles as Putin's residence while he is in St. Petersburg.
Putin had wanted this year's Group of Eight summit to focus on bolstering energy supplies, boosting education and fighting infectious diseases. But the military conflict between Israel and Lebanon is dominating the discussions. Iran's and North Korea's nuclear ambitions also are likely to overtake the agenda.
"We've got a lot to work on," President Bush acknowledged.
Putin demonstrated he was prepared to put in long hours, holding a midnight news conference after attending the summit's opening dinner. And to applause from journalists, Putin said he would make himself available again Sunday night to keep the world informed of the deliberations.
Putin said "maximum efforts must be applied to resolve the situation in a peaceful way and I think all efforts have not been exhausted." He also said he thought Israel was after more than just the return of its two soldiers, but he did not elaborate.
The G-8 countries — the United States, Russia, Japan, Germany, Britain, France, Italy and Canada — were expected to issue a joint declaration on the Middle East.
However the document's drafters were struggling to deal with sharp differences between the United States and the other countries over how to proceed. The United States is pressing for a statement that identifies Hezbollah militants as the main culprit and emphasizes the importance of maintaining a democratic Lebanon.
Bush said Israel has a right to defend itself. "The best way to stop the violence is for Hezbollah to lay down its arms and to stop attacking," he said.
Earlier Saturday, Putin and other leaders criticized what they see as an overreaction by Israel that has caused dozens of civilian deaths and risked a major escalation of bloodshed in the Middle East.
"We are very concerned," said Italian Premier Romano Prodi. "We understand the right of Israel to defend itself, of course, and we understand there were provocations against Israel but we believe the use of force by Israel was disproportionate."
French President Jacques Chirac was even harsher in his comments, saying "One could ask if today there is not sort of a will to destroy Lebanon, its equipment, its roads, its communications."
Japanese Prime Minister Junichiro Koizumi said he understood Israel's anger but urged against seeking "an eye for an eye."
Putin said it was unacceptable for Hezbollah to try to achieve its goals using force and abductions, but he also was critical of Israel's military response.
"The use of force should be balanced. And, in any case, bloodshed should stop as soon as possible," he said.
Despite the differences, he expressed optimism that common the leaders would find common ground.
The G-8 leaders were staying in guest houses on the grounds of Konstantin Palace on the Gulf of Finland, an area sealed off by heavy security. Scuba divers inspected boats ferrying people to the summit, and a surveillance blimp hovered above the sprawling grounds.
Far from the gathering, protesters — some denouncing globalization — faced off with police. They were fewer, though, than the hundreds of thousands that have sought to disrupt some previous summits.
The Kremlin restricted protesters to a stadium in a hard-to-reach part of the city.
"Russia is not a jail! No to the G-8! Rights are not given, they are taken!" protesters shouted at a double row of police — including some heavily armed for riots — surrounding the gate.
About 250 people, meanwhile, attended a rally organized by the Communist Party in the center of the city. About 15 activists en route to that gathering were detained by police; at least two were released later in the day.
Waving red flags, they listened as speaker after speaker berated the G-8; musicians sang nostalgic, Soviet-era songs.
Hours before the summit opened, negotiations between the United States and Russia broke down on Russia's application to join the 149-nation World Trade Organization, which sets the ground rules for global trade.
U.S. Trade Representative Susan Schwab and Russian Economic and Trade Minister German Gref said the few remaining differences could be resolved by the fall.
While a trade agreement was elusive, Bush and Putin said their countries would work together to detect and track terrorists trying to get their hands on nuclear and radioactive materials.
For Koizumi, whose term ends in September, the most important agenda item is North Korea's test firing of seven missiles earlier this month. At this, his final summit, Koizumi, will try to persuade his colleagues to help pressure North Korea. It has proven tricky so far.
The United States, Britain and France are among the countries supporting Tokyo's efforts before the United Nations Security Council to call for a ban on North Korean missile tests and on the country acquiring or exporting missiles, related technology, weapons of mass destruction or their components. Russia and China, which will attend the summit as an observer on the final day Monday, have balked at the possibility of such a tough stance.