Washington - The world's 20 top economies reached a deal Saturday to better regulate global financial markets and take steps to halt a global economic slide.

Negotiators agreed on a final declaration Saturday morning during the first-ever summit of the Group of 20 (G20) nations in Washington, Deutsche Presse-Agentur dpa has learned.

Leaders will sign off on the agreement later Saturday, promising to close all gaps in financial regulation. That includes regulating hedge funds and boosting transparency of some of the complicated mortgage-related securities created by financial firms, which have been blamed for sparking the current financial crisis.

Finance ministers have been given a deadline of March 31 to hammer out the specifics in 50 different areas, followed by another summit of the G20 leaders at a later date, according to the declaration.

US President George W Bush greeted world leaders of the G20 earlier Saturday and said he was pleased with the early results after leaders held a working dinner at the White House Friday night.

But Bush, who is hosting the summit, again warned nations against restricting free markets and trade as a result of the financial crisis.

"I am pleased that we're discussing a way forward to make sure that such a crisis is unlikely to occur again. And I am pleased that the leaders reaffirmed the principles behind open markets and free trade," said Bush, as he welcomed leaders at Washington's National Building Museum.

The meeting in the ornate museum building is closed to the press but is designed to be a free and open discussion between world leaders on ways of averting a financial crisis similar to the one that recently swept through global markets.

Speaking ahead of the meeting, German Chancellor Angela Merkel said the G20 summit marked a "new beginning" for international cooperation and would ensure that "all market participants, all products and all markets will be truly monitored and regulated."

The move to better monitor world financial markets comes in the wake of a round of stock market turmoil and a sharp downturn in the world's economy. The International Monetary Fund (IMF) has forecast a global recession in 2009.

Spanish Prime Minister Jose Rodriguez Zapatero said, "the fundamentals of the economy are not bad. We can and must get out of this situation, but we need coordinated actions for that."

At the White House dinner, world leaders discussed the need for a fiscal stimulus package at the global level, which should be coordinated by industrialized nations, members of the Spanish delegation said late Friday.

Media reports said Brazil could announce its own stimulus package in conjunction with the summit.

But a stimulus is unlikely to come about in the United States until president-elect Barack Obama takes office in January. Talks in the current Congress have stalled but Obama has pledged to make it his first priority.

Obama is not attending the summit but in a radio address Saturday said he was glad Bush "initiated this process because our global economic crisis requires a coordinated global response."

Obama has sent former secretary of state Madeleine Albright and former Republican Congressman Jim Leach to meet over the weekend with world leaders and their advisors on his behalf.

The G20 brings together a mix of industrial nations and developing economies. The Washington summit marks the first time leaders of the G20 have ever come together - a nod to the growing importance of emerging economies such as China, India and Brazil.

Global stocks have been decimated by the financial turmoil that was triggered by a meltdown in the US mortgage market but has since spread to all corners of the globe.

European leaders have sought a major overhaul of global regulations to prevent financial firms from taking the kinds of excessive risks that sparked the sector's collapse, while developing countries are looking to contain the fallout from the crisis that began in advanced economies.

Leaders are also likely to instruct the World Bank to beef up its lending to developing countries, some of which are facing critical cash shortfalls.

Japan on Friday pledged 2 billion dollars to the World Bank's efforts and planned to add 100 billion dollars to the IMF's own lending programme.

While there is a general consensus that nations have responded appropriately to the crisis with short-term measures, a key element of the declaration is likely to be the need for greater regulation and supervision at international and national levels. (dpa)