Page last updated at 15:42 GMT, Saturday, 26 June 2010 16:42 UK

Protest ahead of Toronto summit, 25 June Activists have converged on the summit venues amid tight security

World leaders have been focusing on the disputes with Iran and North Korea on the second day of the G8 summit in Canada, officials say.

In a draft communique, they condemn the alleged sinking by North Korea of a South Korean warship.

And Western leaders are expected to push for a tough stance on Iran over its nuclear programme.

Canada is later to host a summit of the G20 group of industrial and developing powers.

This gathering will discuss the global economy and financial reform.

Efforts to bridge differences over budget policy dominated Friday’s talks.
‘No contradictions’

The twin summits, being held in and near Toronto, have come at a time when largest economies are divided over whether to cut deficits or stimulate economic growth.

US President Barack Obama is worried that a series of austerity measures announced by European countries may delay global recovery.
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The argument over the right way to support the global recovery here at the G20 summit in Toronto is the mirror image of the debate at the London Summit last year

Stephanie Flanders Damned if they do

But on Friday, after an initial meeting of the G8 - US, Canada, Germany, UK, France, Italy, Russiaand Japan - German Chancellor Angela Merkel said there was much common ground.

“I have made it clear that we need sustainable growth and that growth and intelligent austerity measures don’t have to be contradictions,” Mrs Merkel told journalists.

A senior US official told reporters Saturday’s G8 session was “going to focus on peace and security - Iran and North Korea will be discussed”.

The unnamed official said Mr Obama would also meet the leaders of South Korea on Saturday, and of China and Japan on Sunday, to discuss regional security following the sinking of a South Korean warship in March.

An international inquiry blamed North Korea for the incident, in which 46 sailors died. Pyongyang denies involvement.

Canadian government spokesman Dimitri Soudas said the sinking of the Cheonan was “a very serious provocation and threat to regional and international stability”.

He added: “North Korea and the North Korean nuclear programme remain a serious threat to global security.”
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On Iran, the UN Security Council earlier this month approved a fourth round of sanctions on Tehran for failing to halt nuclear enrichment.
Continue reading the main story Canadian flag G8 powers to boost aid to mothers Cameron and Obama to hold talks G8/G20 summits security map

The measures include tighter finance curbs and an expanded arms embargo, but not the crippling sanctions the US had wanted.

Later the EU imposed additional sanctions on Iran - a moved that was criticised by Russia.

On Saturday, the G8 leaders will be joined by China and other rising economic powers for the G20 summit.

Mr Obama has called for the group to pull together to promote economic growth, saying that world economies are “inextricably linked”.

BBC economics correspondent Andrew Walker says there is a dilemma for the group on the best timing for fixing debt problems, our correspondent adds.

Also on Friday, the G8 also agreed to donate $5bn (£3.3bn) over five years towards improving the health of mothers and young children in the developing world.

The pledge, intended to help tackle one of the UN Millennium Developments goals, was described as inadequate by anti-poverty groups.