Washington  - US President Barack Obama has been squabbling with Western European leaders over how to handle issues such as the global economic crisis and climate change, and those differences appeared to hang over the upcoming G8 summit in Italy.

But in the weeks since Iran's June 12 election and subsequent mass demonstrations alleging that the result was rigged, the United States and Western European allies have found a unified voice in condemning the violent crackdown against protestors, and the issue will play prominently at the July 8-10 gathering of the eight leading economies in L'Aquila, Italy.

It will be Obama first Group of Eight summit since taking office in January.

While Russia has been reluctant to come down hard on Iran over its nuclear programme and the election turmoil, Britain, Canada, France, Germany, Italy, Japan and the United States have all criticized Tehran for suppressing the freedom of expression.

Russia has been the only G8 country to declare that Iranian President Mahmoud Ahmadinejad was the clear victor in the election over challenger Mir-Hossein Moussavi. Obama has opted to let the situation play out while decrying the violence.

"We can't say definitively what exactly happened at polling places throughout the country," Obama said. "What we know is that a sizeable percentage of the Iranian people themselves, spanning Iranian society, consider this election illegitimate."

Italian President Silvio Berlusconi on Monday said that potential sanctions against Iran will be on the table at the G8 summit, but it remains to be seen whether such a move would garner widespread support. British Foreign Secretary David Miliband has played down the possibility of sanctions.

The United States has had comprehensive sanctions in place against Iran for decades, and Obama might be unwilling for now to back sanctions in response to an internal Iranian dispute, over concerns it could harm chances for opening direct negotiations with Tehran on the nuclear issue.

Western countries remain unified in preventing Iran from developing nuclear-weapons capability. In the preparatory meeting of G8 foreign ministers last week in Trieste, Italy, they issued a statement setting a September deadline for Iran to rejoin negotiations, including direct talks with the United States.

Obama has pledged to hold direct dialogue with Iran on the nuclear matter and a host of other issues, but has not outlined a definitive approach for doing so and is awaiting the outcome of the upheaval. He has warned however, that his overture will not be open-ended and that he would expect positive steps from Tehran by the end of the year.

The G8 summit comes ahead of the larger Group of 20 nations planning to meet in September in the US city of Pittsburgh, Pennsylvania, to discuss the economic crisis. Obama has been at odds with his European counterparts, who want to see more regulation of US financial markets.

The gap on that issue has been most acute with German Chancellor Angela Merkel and French President Nicolas Sarkozy, but the two sides appear to moving closer to common ground since Obama announced his regulatory plan earlier this month.

During a meeting at the White House between Merkel and Obama on Friday, the two leaders appeared to move closer on climate change. Germany in the past had expressed frustration with the Obama administration for not doing enough to fight global warming.

But her visit coincided with the passage of legislation in the House of Representatives that for the first time would place limitations on greenhouse gas emissions in the United States.

"The fact that with the United States we stand where we stand today is an enormous success, which I would not have thought possible a year ago," Merkel said. (dpa)