The demands were laid out in a draft declaration by leaders of the world's most industrialised democracies seen by AFP, which could yet be watered down, especially given Russia's strong Middle Eastern alliances.

The strongest language was reserved for Kadhafi, with even Russia apparently backing a demand for the strongman to quit, even though Moscow claimed it had been asked to promote a negotiated settlement to the Libya conflict.

"We demand the immediate cessation of the use of force against civilians by the Libyan regime forces as well as the cessation of all incitement to hostility and violence against the civilian population," it said.

"Kadhafi and the Libyan government have failed to fulfil their responsibility to protect the Libyan population and have lost all legitimacy. He has no future in a free, democratic Libya. He must go," it warned,

US President Barack Obama said after talks with French G8 host President Nicolas Sarkozy that "we have made progress on our Libya campaign."

The United States provided the bulk of the firepower blitz which launched the NATO campaign in Libya, but has since taken on a support role with European nations, especially France and Britain, to the fore.

The US leader warned the "UN mandate of civilian protection cannot be accomplished when Kadhafi remains in Libya directing his forces in acts of aggression against the Libyan people."

"We are joined in resolve to finish the job."

An earlier draft that threatened Syria with United Nations Security Council sanctions if Damascus continues its bloody oppression of protests was softened under pressure from ally Russia to warn simply of "further measures".

"We call on the Syrian leadership to immediately stop using force and intimidation against the Syrian people and to respond to their legitimate demands for freedom of expression and universal rights and aspirations.

"Should the Syrian authorities not heed this call, we will consider further measures. We are convinced that only by implementing meaningful reforms will a democratic Syria be able to play a positive role in the region."

The draft voiced "strong support" for US President Barack Obama's vision for Israeli-Palestinian peace.

The leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States urged the two sides "to return to substantive talks with a view to concluding a framework agreement on all final status issues."

"To that effect, we express our strong support for the vision of Israeli-Palestinian peace outlined by President Obama on May 19, 2011," it said, referring to his call for the 1967 lines to be the basis for peace talks.

"The time to resume the Peace Process is now," the draft statement said, calling also for an easing of the situation in the Gaza Strip.

With popular revolts sweeping the region, the G8 is expected to pledge billions in aid to help Tunisia and Egypt along the path towards democracy after their successful anti-regime uprisings earlier this year.

Both economies were hit hard by the tumultuous events of January and February, and Egypt wants between 10 and 12 billion dollars in aid by the middle of next year, Tunisia 25 billion dollars over the next five years.

Tunisian Prime Minister Beji Caid Essebsi and his Egyptian counterpart Essam Sharaf were in Deauville for an enlarged G8 session on Friday, along with the UN, the Arab League and the IMF.

British Prime Minister David Cameron on Thursday pledged 110 million pounds ($175 million) to foster democracy in the region -- and Sarkozy is expected to push his partners for more.

Africa is also in the G8 spotlight with leaders hosting the newly elected presidents of the Ivory Coast, Niger and Guinea for a session to encourage democracy.

G8 leaders were expected to agree a statement backing a limited government role in policing the Internet, and to agree on boosting global nuclear safety standards in the wake of Japan's devastating tsunami-triggered nuclear tragedy.

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