President Barack Obama, buoyed by a domestic victory on climate policy, faces his first foreign test on the issue next week at a forum that could boost the chances of reaching a U.N. global warming pact this year.

Obama, who has pledged U.S. leadership in the fight against climate change, chairs a meeting of the world's top greenhouse gas emitters at the G8 summit in Italy on July 9.

Known as the Major Economies Forum, the grouping includes 17 nations that account for roughly 75 percent of the world's emissions, making any agreement from its leaders a potential blueprint for U.N. talks in Copenhagen in December.

Meetings of the forum, which Obama relaunched earlier this year, have so far failed to achieve major breakthroughs.

Developing countries want their industrial counterparts to reduce emissions by 25 to 40 percent below 1990 levels by 2020, while rich nations want developing states to commit to boosting their economies in an environmentally friendly way.

Those debates and others will be featured at the Italy meeting, the first at a heads of state and government level, and all eyes will be on Obama, whose climate initiatives European leaders have lauded while privately pressing him for more.

Europeans want to seize this moment to push as hard as they can on the Americans to get significant ... targeted commitments on carbon emissions reductions, said Heather Conley, a senior fellow at the Washington-based Center for Strategic & International Studies.

They know that this is going to be a very careful walk along the road to Copenhagen in December and they're going to publicly praise and privately push hard.

A Democrat, Obama has reversed the environmental policies of Republican predecessor George W. Bush by pressing for U.S. greenhouse gas emission cuts and a cap-and-trade system to limit carbon dioxide (CO2) output from major industries.

The House of Representatives helped turn that vision into a potential law last week by passing a bill that would require large companies to reduce greenhouse gas emissions 17 percent by 2020 and 83 percent by 2050, from 2005 levels.

CHALLENGES, LEADERSHIP

But those figures are still below what many scientists say is necessary and -- potentially more dangerous for the Copenhagen process -- the measures face obstacles to their passage through the U.S. Senate.

Washington has resisted calls to endorse the aim of limiting global warming to no more than 2 degrees Celsius at the G8 summit, though a European official said on Wednesday the United States was now on board for that goal.

The politics of climate change are stuck, despite Obama coming in, said Alden Meyer of the Union of Concerned Scientists. He said the United States was still on the defensive in comparison to the more progressive European Union.

Despite those challenges, White House officials said the president would carry momentum to the G8.

Bolstered by the great progress in the House last week, the president will ... press for continued progress on energy and climate, Denis McDonough, the White House deputy national security adviser, told reporters.

Activists hope Obama's presence will pay dividends.

This is really a chance for President Obama to bring what he's most known for here in the U.S. -- hope and change -- into the climate dialogue internationally, said Keya Chatterjee, director of international climate negotiations at environmental group WWF in Washington.

She said other industrialized nations had used the Bush administration's reluctance to sign up to major emissions curbs as an excuse to avoid making their own strong commitments.

In the past year it's been very easy for Canada and Russia and Japan to hide behind the Bush administration, but they don't have that to hide behind anymore, she said.

A draft copy of the statement to be released by the major emitters sets a goal for the world to reduce emissions 50 percent by 2050, but it does not include a base year.

The draft also gives a nod to the broad scientific view that the increase in global average temperature above pre-industrial levels ought not to exceed 2 degrees C without specifically endorsing that goal.

(Additional reporting Alister Doyle, editing by Vicki Allen)

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