Washington  - US President Barack Obama insisted Saturday that there were no divisions forming over economic stimulus policies among leaders attending next month's summit of the world's 20 leading economies.

Obama, who held talks Saturday with Brazilian President Luiz Inacio Lula da Silva on the global financial crisis and energy issues, was asked by reporters about perceived difference between the US, which has started running up trillion-dollar deficits for economic stimulus spending and financial industry bail-outs, and the European Union, where concerns about government borrowing have so far limited stimulus measures.

"I can't be clearer in saying that there are no sides. This is a phony debate," Obama said.

"We do believe that it is important for all countries around the world to step in and figure out how we can ensure that we are compensating for the drastic contraction in global demand. We're not unique in that position."

He called for "worldwide concerted action to make sure that the massive contraction in demand is dealt with." But responding to the global recession was not a matter of choosing a single action but of blending "a whole range of approaches."

Obama noted that governments in Britain, China and Australia have already launched programmes to spur their economies.

"And the Europeans have taken some steps with respect to stimulus and increasing global demand. Not every country is going to do the same levels (of stimulus)," he said.

"But as I've said here in this country, and I will repeat in the G20, fiscal stimulus is only one leg in the stool. We have to do financial regulation, and nobody is going to be a more vigorous promoter of the need for a reform of our financial systems. I think most of those initiatives are going to be taking place in individual countries, but there's going to need to be coordination between the various countries."

Obama and Lula both said that helping poor and developing countries through the economic crisis would be an important goal of the Group of 20 Summit on April 2 in London.

Obama's meeting with Lula at the White House was his third with a foreign leader and first with one from Latin America, signalling the importance with which his administration views the region and its role in pulling the world economy out the continuing downturn.

Brazil so far has been able to weather the bad economy.

The United States is eyeing Brazil's large bio-fuel resources as the Obama administration seeks to counter US dependence on foreign oil.

Lula has declared his interest in improving US relations in the hemisphere, including with traditional Washington foes Cuba and Venezuela.

But the top priority was the world economy and the upcomign summit, where world leaders are seeking to coordinate efforts to halt the economic contraction.

Obama's predecessor, George W Bush, launched an initiative to work with Latin American countries on production of bio-fuels, as oil prices reached record highs during the last two years, prompting worries of a global energy crunch.

Obama's stimulus package, approved by Congress last month, includes 15 billion dollars to develop cleaner energy technologies as part of his effort to create jobs in the United States while curbing greenhouse gas emissions and combating global warming.

The United States has pressed Brazil on the issue of an 8-year-old boy, whose American father is seeking his return to the United States in a custody case that was expected to come up during the meeting. The boy has lived with his stepfather in Brazil since his mother died in 2007.

The boy's Brazilian mother took the boy, Sean Goldman, to Brazil after splitting with her ex-husband David Goldman four years ago. She refused to return, and then divorced and remarried.

A Brazilian court has granted custody to the stepfather.

Obama has been briefed on the issue, and Secretary of State Hillary Rodham Clinton has conveyed the US position to Brazilian officials.

The US House of Representatives this week passed a resolution unanimously calling on Brazilian authorities to return Sean to his native country.

Following his meeting with Obama, Lula is set to travel to New York, where he is to deliver a lecture Monday to US business people on opportunities for foreign private investment in Brazil. dpa