Later, he will fly to Paris - ahead of events commemorating the 70th anniversary of the Allied invasion of Normandy – where he will have dinner with French President Francois Hollande.
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There were smiles early Thursday as the leaders met in front of the cameras and posed for the traditional group photographs. Obama was flanked by Canadian Prime Minister Stephen Harper and Herman Van Rompuy, president of the European Council.
Thursday’s summit was originally supposed to have taken place in Sochi, Russia, but those plans were cancelled when Russia annexed the Crimean Peninsula.
It is the first time since 1997 that the summit has taken place without Russia.
"Our free nations will stand united so that further Russian provocations will only mean more isolation and costs for Russia," Obama said late Wednesday.
Obama foreign policy adviser Ben Rhodes said G-7 leaders would discuss the future approach on sanctions during their meetings. "We'll have to evaluate going forward, what are the triggers for different types of sanctions," Rhodes told The Associated Press. "That would be reviewing whether or not Russia is continuing to destabilize Eastern Ukraine and whether or not Russia is continuing to support separatist groups."
Also on the summit agenda are the global economic outlook, climate change and development issues.