President Vladimir Putin will play host in his native Saint Petersburg, an elegant city of palaces and canals on the Gulf of Finland built as a window on Europe and once the capital of the Tsarist empire.

The summit starting Saturday marks a high point of Putin's term in office, two years before the end of his mandate.

Since his election in 2000, observers say the Kremlin chief has turned his country into a new global power but rolled back democracy in the process.

But the high-stakes energy security debate and the need to cooperate on pressing international issues mean that the leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States are less likely to clash over Russia's political situation.

The need for the powerful group to close ranks has been underlined in the run-up to the summit by North Korea's series of missile tests. Although there have been unanimous expressions of concern over Pyongyang's demonstration of force, Russia is opposing US-led calls for economic sanctions.

There are similar divisions over Iran's nuclear programme. Russia is crucial to persuading Tehran to give up its controversial uranium enrichment work, but Moscow does not support raising the threat of sanctions -- in contrast to the United States and Europe -- should Iran refuse to bend.

The other hot-button issue is energy security.

In January, a gas dispute between Russia and Ukraine woke Europe with a jolt to its growing dependence on Russian energy supplies and Brussels, like Washington, is worried Moscow may use its vast reserves for political ends.

In Saint Petersburg, global powers will be asking their host for energy security guarantees. Putin, who has put the issue at the centre of Russia's G8 presidency agenda, has already said Moscow is ready to provide these.

But demands from the United States and other big energy consumer states for more "transparency" from Russia and other big energy producers must be matched by similar disclosure of information by consumer states.

The exchange between Russia and its energy-dependent G8 partners risks turning heated over the issue of investment.

G8 powers are calling for more access to the immense reserves of Siberia but Russia says it will only grant this if Gazprom, the country's state-controlled gas giant, can invest in European markets.

"If our European partners expect us to allow them into the holy of holies of our economy, energy... then we want reciprocal steps that help our own development," Putin said at a Russia-EU summit in May.

The Group of Eight, begun as the Group of Six by then French president Valery Giscard d'Estaing in 1975, will also have to contend with growing Israeli-Palestinian violence, another area where Moscow, which invited Hamas leaders to talks earlier this year, also aspires to play a bigger role.

Holding important diplomatic cards and enjoying an oil-fuelled economic boom, Russia will have a strong hand if faced with criticism over the Kremlin's commitment to democracy, human rights and a free media.

US President George W. Bush is under pressure to criticise Putin for democratic failures from key Republican supporters, such as Senator John McCain, who has called for a boycott of the summit.

But the tone of discussions is likely to stay balanced.

French President Jacques Chirac said last month that Putin "represents the Russia of today, a Russia that we must absolutely support and encourage to pursue its efforts at democratic modernisation."

The eight world leaders are also preparing to discuss measures to stop the spread of infectious diseases, boost aid to poor countries and increase funding for education.

On the sidelines of the summit, the issue of Russia's membership of the World Trade Organisation, now dependent on Washington's approval, is likely to come up.

Moscow, which has come under criticism for turning a blind eye to rampant video and music piracy in the country, has threatened to pull out of international trade agreements if it is rejected.

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