US President Barack Obama is to press European leaders to ease up on fiscal austerity and focus on economic growth in a bid to stem turmoil in the eurozone and head off the risk of global contagion.
The urgency of the summit was underscored by the announcement of a new national ballot in Greece after party leaders failed to form a coalition government following the recent inconclusive election.
"We are calling a general election for June 17," said a statement from the Greek parliament's press office yesterday.
The May 6 election produced a hung parliament in Athens divided between supporters and opponents of Greece's €130 billion international bailout, with political leaders unable to agree a cabinet.
The anti-bailout leftist Syriza party has reclaimed a slight lead in the latest polls, but the pro-bailout New Democracy and Pasok parties, which were trounced at the last election, are gaining strength.
The need for a new election caused political uncertainty and rekindled fears that the debt-laden country may be forced out of the eurozone. After days of failed coalition talks with party leaders, President Karolos Papoulias named senior judge Panagiotis Pikrammenos as the caretaker prime minister until the new vote.
Meanwhile, at Camp David in Maryland's Catoctin Mountains, Obama and leaders from other large economic powers tried to forge a common approach to tackling a crisis that threatens the future of Europe's 17-nation single currency.
Though no major policy decisions will come from the summit, leaders of the US, Germany, France, Britain, Japan, Russia, Italy and Canada hope they can bridge enough of their differences to soothe rattled financial markets after worries about the risk of a Greek exit from the eurozone sent European stock prices falling to their lowest level since December.
"Hopefully we'll get some stuff done," Obama told Italian Prime Minister Mario Monti as he and other summit participants arrived at the secluded presidential retreat.
Obama has aligned himself with Monti and new French President Francois Hollande by urging a solution to the eurozone crisis that combines fiscal belt-tightening with a "strong growth agenda".
"President Hollande and I agree that this is an issue of extraordinary importance not only to the people of Europe but also to the world economy," Obama added.
Hollande said he and Obama shared "the same conviction that Greece must remain in the eurozone".
On the other side of the debate is German Chancellor Angela Merkel, who has pushed fiscal austerity as a means of bringing down the huge debt levels that are burdening European economies.
Voters in eurozone countries have shown frustration with that approach, ejecting governments such as that of Nicolas Sarkozy, who was defeated by Hollande, a socialist, in the French presidential election on May 6.
Meanwhile, British Prime Minister David Cameron said Greece must decide if it wants to remain in the euro.
"We need decisive action from eurozone countries in terms of strengthening eurozone banks, in terms of a strong eurozone firewall and decisive action over Greece. That has to be done," he said.
The office of the Greek interim prime minister has claimed that Merkel suggested the country hold a referendum on euro membership on election day. However, Merkel's Cabinet dismissed the statement as "false".
A summit communique will stress an "imperative to create growth and jobs".
Also on the summit agenda are concerns about oil and food prices as well as Afghanistan, Iran, Syria and North Korea.
The Camp David summit kicked off a round of intensive diplomacy that will test leaders' ability to quell unease over the threat of another financial meltdown, as well as plans to wind down the unpopular war in Afghanistan.
After the Camp David talks most of the G8 leaders will fly to Chicago for a two-day Nato meeting at which the Afghanistan war will be the central topic.