She wants the club -- composed of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- to agree concrete steps to halt global warming that would prepare the ground for an extension of the Kyoto Protocol beyond 2012.

Merkel faces strong resistance from the United States, which refused to sign up to Kyoto and opposes binding emission reduction targets despite recent UN reports warning of rising sea levels, droughts and floods linked to climate change.

"We must significantly, and quickly, reduce the emissions of greenhouse gases to limit the earth warming to two degrees Celsius," Merkel told the German parliament, calling global warming one of humanity's most important challenges.

"It is important that the G8 develops a common understanding how climate change can be tackled and what agreements can be made for the period beyond 2012," she added.

"I can say quite openly that today, I don't know if we will succeed in that at Heiligendamm. But for me it is clear that the big developed nations must take the lead on this issue if we are to have a chance at fighting climate change."

One of the reasons Washington cited for not signing up to Kyoto was that rising powers like China and India were not part of it. Merkel has invited these two countries, as well as other emerging nations Brazil, Mexico and South Africa, to the summit in the hope of a breakthrough.

But the United States has given no sign it is willing to compromise. It wants key targets and timetables for combating global warming -- including a pledge to halve emissions by 2050 -- removed from a draft summit communique seen by Reuters.

The UN's Intergovernmental Panel on Climate Change (IPCC) has said emissions must be cut by at least 50 percent by the middle of the century to stop the planet from heating up by more than 2 degrees Celsius (3.6 Fahrenheit).

In her speech to German lawmakers, Merkel touched on a wide range of topics that leaders are expected to tackle in Heiligendamm, a quiet seaside hamlet that was founded in 1793 as an exclusive summer spa for European nobility.

She acknowledged that G8 leaders were unlikely to make headway on a German push to increase transparency in the US$1.6 trillion hedge fund industry, but argued that a code of conduct for the highly-leveraged investment vehicles was still needed.

As on climate, the United States has reservations about Germany's hedge fund drive, which has also failed to catch on with other G8 countries.

Merkel has pushed Africa to the top of her agenda. Ahead of the summit, aid groups are pressing G8 countries to live up to their commitments to boost development aid and forgive debts, amid signs some are not delivering on promises made at a G8 meeting two years ago.