The leaders of Germany and the United States hammered home a tough line on Russia Sunday as they kicked off a G7 summit dominated by crises in Ukraine and Greece.

German Chancellor Angela Merkel began proceedings by treating US President Barack Obama to some traditional Bavarian beer garden hospitality, with frothy ale, pretzels and oompah brass music played by locals in lederhosen.

But after the smiles in the sunshine, the two issued a stark warning to President Vladimir Putin over what Obama said was his "aggression" in Ukraine.

"The two leaders... agreed that the duration of sanctions should be clearly linked to Russia's full implementation of the Minsk agreements and respect for Ukraine's sovereignty," a statement from the White House said, referring to a ceasefire deal struck in the Belarus capital.

The folksy welcome and display of US-German unity contrasted sharply with the leaders' line on Russia, which was excluded from the talks.

Merkel said later that Moscow should stay out of the G7 "community of values" for now over its actions in Ukraine.

"There is a barrier at the moment and I can't really see how it can be overcome," she told German public broadcaster ARD.

The Japanese and Canadian leaders had Saturday made a point of visiting Kiev on their way to Germany to voice support for Ukraine's embattled leaders, as government troops again traded fire with pro-Russian rebels in the east.

A key G7 issue would be "standing up to Russian aggression in Ukraine," Obama said ahead of the talks with Britain's David Cameron, France's Francois Hollande, Italy's Matteo Renzi, Canada's Stephen Harper and Japan's Shinzo Abe.

A recent flare-up in fighting in east Ukraine has left at least 28 dead and sparked fears that the escalation will derail the hard-won ceasefire brokered by France and Germany four months ago.

The situation remained "tense" in eastern Ukraine, the Ukrainian army said, with eight soldiers wounded in the past 24 hours.

- Greece debt drama -

Obama, without naming crisis-hit Greece, also pointed at the ongoing troubles with debt-hit Athens, mentioning as the top summit issues "the global economy that creates jobs and opportunity" and "maintaining a strong and prosperous European Union".

Merkel -- a champion of tough reforms in return for loans -- had made a last-ditch effort to resolve the Greek crisis in the days before the G7 summit, huddling during the week with the key players in Berlin.

Yet the Greek drama still loomed over the G7 summit, which Merkel hoped to focus on other pressing global issues -- from climate change and Islamist extremism to women's rights, public health initiatives and the fight against poverty.

Arriving at the meeting, European Commission chief Jean-Claude Juncker hit out at Greek Prime Minister Alexis Tsipras for misrepresenting creditors' demands for reforms in return for cash.

Tspiras had presented the EU's proposal as a take-it-or-leave-it offer, said Juncker, even though he "knew perfectly well that I was willing to discuss the main points of disagreements".

Greece's radical-left government and its creditors have been locked in negotiations for five months in a bid to unlock 7.2 billion euros (US$8 billion) in desperately-needed rescue funds.

Ratcheting up the rhetoric, Finance Minister Yanis Varoufakis told Proto Thema daily Sunday that the demands were "an aggressive move designed to terrorise the Greek government" and declared "this Greek government cannot be terrorised".

- Ring of steel -

Merkel had hoped to use the picture-book setting of lush Bavarian meadows and magnificent mountain peaks to showcase the homely side of Europe's biggest economy while searching for consensus on a catalogue of pressing global issues.

Non-governmental organisations have also mobilised at the event, holding global leaders' feet to the fire on issues such as climate change and deadly diseases like Ebola, which has killed more than 11,000 people.

"If a global pandemic were to strike again tomorrow, there is still no resourced coordinated international response to kick in and thousands could die," Medecins Sans Frontieres president Joanne Liu said in a message to the summit.

"There is a real danger that despite the promises, nothing will come out of this G7 and it will be business as usual."

A day after thousands protested against the G7 in largely peaceful rallies, a handful staged a sit-in Sunday to block the main access road to the castle, meaning journalists were transported by helicopter to the location.

The protesters told AFP they had managed to sneak through the woods unnoticed by police, despite the presence of over 22,000 officers who set up a ring of steel around the summit venue.
Source: AFP