German Chancellor Angela Merkel pressed fellow Group of 20 leaders to compromise at the start of talks on climate and trade that have pitted US President Donald Trump against virtually every other country in the club of leading economies.
"We all know the big global challenges and we know that time is pressing," Merkel told the group.
"And so solutions can only be found if we are ready for compromise and move towards each other, but without, and I stress this, bending too much, because of course we can also state clearly when there are differences."
Merkel, who is gearing up for a parliamentary election in September, faces the daunting task of steering the G20 towards a consensus on trade, climate change and migration - all issues that have become more contentious since Trump entered the White House half a year ago promising an "America First" approach.
Last month he pulled the United States out of a landmark international agreement aimed at combating climate change. And he is threatening to take punitive trade measures in the steel sector which would hit China, Germany, Canada and a host of other countries.
The Chinese state news agency Xinhua reported that President Xi had called on G20 nations to strengthen macroeconomic policy coordination and forestall risks in financial markets.
"Xi also urged G20 members to develop financial inclusion and green finance to make the financial sector truly drive the development of the real economy," Xinhua added.
Envoys have been working for weeks to bridge differences, and European sources said they had come up with new language on the climate issue on Thursday which would be put to the leaders for approval.
The latest draft communique sticks with language about the Paris climate accord being "irreversible" but removes a reference from an earlier version to a "global approach" that some countries felt could suggest there was a parallel track to Paris.
It also includes a new paragraph which says the United States will "work closely with other partners to help their access to and use of fossil fuels more cleanly and efficiently". Some experts were sceptical whether leaders would approve the reference to fossil fuels, which would be a clear nod to Washington.
Earlier, leaders of the BRICS countries, Brazil, Russia, India and China, called on the G20 to push for implementation of the Paris climate deal despite Trump's decision to pull out.
On the policy front, sources said that Washington was backtracking on language condemning trade protectionism that Trump agreed to at a Group of Seven meeting in Sicily in May.
The BRICS countries pushed back in a statement saying: "We firmly support a rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system, implementation and enforcement of existing WTO rules and commitments and oppose protectionism."
Hanging over the trade discussions is a threat by Washington to use a Cold War-era law to restrict steel imports based on national security concerns, a step that would hit the Chinese as well European producers.
European Commission President Jean-Claude Juncker said on Friday morning in Hamburg that the EU would respond "immediately and adequately" if the US took action on steel.
After sessions on terrorism, the global economy and climate on Friday, the leaders will be joined by their spouses for dinner at the Elbphilharmonie, a striking new glass concert hall perched atop an old warehouse building overlooking the Elbe River.