Divided on economic remedies, the leaders searched for common ground on other issues, such as confronting nuclear standoffs with Iran and North Korea, maternal and infant health care and dealing with the AIDs epidemic.
Despite a big win early Friday as congressional negotiators in Washington reached a hard-fought compromise on new Wall Street banking rules, Obama has been stymied on his pleas to Congress for more jobs and stimulus money. It seemed doubtful he could claim much momentum from the legislative win in corralling world leaders behind stronger global banking rules.
Obama's call for more spending to keep world economies from slipping back into recession was being rebuffed by leaders in Europe and Japan who instead have emphasized cutting government spending and even raising taxes.
Leaders of the so-called Group of Eight - an aging club of rich democracies that include the U.S., Canada, Britain, Germany, France and Japan plus Russia - met for their annual session at a resort in Canada's sprawling Muskoka region of lakes and vacation cottages several hours drive north of Toronto.
Today and Sunday, the focus was to shift to Toronto, where they will be joined by 12 leaders representing fast-growing developing economies including China, India and Brazil. At a time when leaders were discussing fiscal austerity, Canada's prime minister, Stephen Harper, has come under criticism over the projected costs of the summits, including at least $900 million for security and $2 million for a theme park inside the media center that includes an artificial lake with canoes, trees, deck chairs and a fake dock.
The so-called Group of 20 has been gradually overshadowing the Group of Eight as the world's premier forum for discussing and coordinating economic policy.
After showing strong solidarity in earlier sessions during the height of the financial crisis, the leaders are divided now over whether to stimulate economic growth with more spending - as Obama wants - or to rein in budget deficits in light of debt crises in Greece and other heavily indebted nations.
Britain's new conservative prime minister, David Cameron, clearly is siding with budget austerity and sounded a skeptical tone Friday over the ability of leaders to carry out their soaring promises.
Cameron's government unveiled an emergency budget Tuesday that included higher taxes and the toughest cuts in public spending in decades. "Those countries with budget deficits need to do that and, as a world, we need to address the imbalances," he said Friday after meeting with Harper, the summit host.
And in an opinion piece published Friday in the Canadian newspaper the Globe and Mail, Cameron wrote that calls to action and pledges issued regularly by the Group of Eight and other economic groupings seldom bear fruit.
"The G-8 needs to demonstrate to the public that when we get together and sign up to these things, we mean it," Cameron said.
Unmet pledges getting special attention this year: the G-8's vow in Scotland five years ago to double international aid to Africa by 2010 and to make significant strides in providing access to AIDs treatment to all who need it. Neither of those goals have been achieved.
The G-8 was holding an outreach session with leaders of seven African nations. Nigerian President Goodluck Jonathan said the G-20 - which now has only one African member, South Africa - should be expanded.
"We are talking about the global village. What affects one nation affects the other. If African nations have challenges, the West also pays for it," Jonathan said in an interview with The Globe and Mail. Nigeria is Africa's most populous country.
Another top discussion point for the G-8 was a proposal by Canada's Harper to bolster support for maternal and child health care in poor nations.
While most attention this year focused on economic issues, the leaders were also expected to discuss the world's tense hot spots, including the long-lasting war in Afghanistan, tensions in the Middle East and nuclear ambitions of Iran and North Korea. Those discussions were planned for Friday night.
The U.S. and its allies will be looking to convince China to support U.N. Security Council action to hold North Korea accountable for the sinking of a South Korean warship in March.
On Iran, the U.S. and European nations will push other major powers to join them in imposing tough new sanctions on Tehran over its nuclear program, building on expanded Security Council measures adopted earlier this month.
But China and Russia only reluctantly supported the sanctions, and have balked at new unilateral steps against Iran, saying any measures should not exceed those called for by the Security Council.
Russia's bid to join the World Trade Organization - for which Obama voiced strong support on Thursday after a meeting in Washington with Russian President Dmitry Medvedev - could also come up. Obama pledged to help Russia speed up its more than decade-long bid in hopes that Moscow could win acceptance as early as Sept. 30.
After meeting through the night in Washington, congressional negotiators cleared a far-reaching financial overhaul proposal with the help of an administration-brokered compromise that limits the ability of banks to do their own trading of complex financial instruments known as derivatives.
Obama suggested the agreement, expected to be endorsed by the full House and Senate as early as next week, should send a message to other nations to clean up their banking practices.
"We need to act in concert for a simple reason: This crisis proved and events continue to affirm that our national economies are inextricably linked," Obama said on the White House lawn before leaving for Canada. "At the G-20 summit this weekend, I'll work with other nations not only to coordinate our financial reform efforts but to promote global economic growth."
The G-20 group represents 85 percent of the global economy and the United States wants this group to endorse the outlines for global financial reform to eliminate the threat that banks facing tougher regulations in one jurisdiction will move their operations to countries with more lax rules.
With security extremely tight both in Huntsville and Toronto, there were few new incidents of problems, although street demonstrations in Toronto were planned for later in the day.