The meeting of the G7 in Germany comes a year after the grouping of major world powers forced Russia from its ranks.
Ensconced in the Schloss Elmau hotel high in the southern German Alps, Obama was expected to urge his European counterparts to extend sanctions on Russia, which have weakened the ruble and caused some discontent among the Russian population, administration officials said.
Obama said Sunday that "Russian aggression" in Ukraine was at the top of the G7 agenda, along with bolstering trade, addressing climate change and combating violent extremists.
Referring to Ukraine, Obama said, "We think that there can be a peaceful, diplomatic resolution to this problem, but it's going to require that Europe, the United States and the Transatlantic Partnership, as well as the world, stay vigilant and stay focused on the importance of upholding the principles of territorial integrity and sovereignty."
During a bilateral meeting with German Chancellor Angela Merkel, the White House said the leaders "agreed that the duration of sanctions should be clearly linked to Russia's full implementation of the Minsk agreements," a short-lived ceasefire in the Ukraine crisis reached in March. Since that agreement, there have been multiple violations, including advances by heavy weaponry.
More than half of the meeting was focused on the situation in Ukraine, White House Press Secretary Josh Earnest said.
"We have said since the day the sanctions were in place that the U.S. and partners put these in place because our expectation is that Russia should live up to Minsk agreement," Earnest said. "We made clear we would relieve sanctions if they lived up to agreement. They've done the opposite and redoubled."
Those violations led leaders again to bar Russia from their gathering this year. Speaking Sunday, European Council President Donald Tusk said that "all of us would prefer to have Russia around the G7 table" but that that Russia wouldn't be invited "as long as it behaves aggressively toward Ukraine and other countries."
Earlier Sunday, Obama made a friendly stop in Krün, an Alpine village where lederhosen and dirndls abounded. He hailed U.S.-German ties, calling the two nations "inseparable" and praising Merkel for her leadership.
Later, Obama removed his suit jacket and joined locals for pretzels, sausages and tall glasses of German beer.
Making the case for sanctions
Obama must persuade his European counterparts to extend the Russian sanctions, even as the White House admits those measures have done little to slow the campaign of Russian-backed separatists along the border with Ukraine, where thousands have died since the conflict began last year.
Moscow denies allegations it is sending Russian troops and military hardware over the border, or arming the separatists.
Obama must also shore up support among U.S. allies for his strategy against ISIS terrorists in Syria and Iraq, where the fall of Ramadi has prompted new calls for ramped-up assistance to the Iraqi military and Sunni fighters in Anbar province.
Obama planned to meet with Iraqi Prime Minister Haider al-Abadi in Germany on Monday. Al-Abadi was expected to press the United States for more equipment he says is desperately needed to combat ISIS advances.
But Obama isn't likely to announce any new assistance to Iraq this weekend, according to the officials, who say the administration is continually assessing its training and equipment shipments to Baghdad.
Obama also has been reluctant to provide lethal aid to Ukrainian troops, currently engaged in some of the fiercest fighting in their conflict with Russian-backed separatists since a rocky ceasefire deal was agreed to in February.
Resistant to sending lethal aid
Vice President Joe Biden, speaking last month in Washington, said the shipments were still under consideration, and senior members of Obama's administration -- including Defense Secretary Ash Carter and Joint Chiefs Chairman Gen. Martin Dempsey -- have voiced openness to arms shipments.
But European leaders, led by Merkel, have fiercely opposed lethal aid out of fear the violence could escalate.
Any decision on sending arms to Ukraine appeared unlikely at the G7 meeting.
"I think our general view is 'steady as she goes' on that front," said Charles Kupchan, Obama's senior director for European affairs. "We've always said that we favor and are pushing toward a diplomatic settlement to the crisis."
Such a solution has so far evaded Western leaders, who attempted to broker a lasting ceasefire this year in Belarus. Recent violations have included heavy artillery fire near the eastern city of Donetsk. Observers said last week it was some of the worst fighting since the agreement was declared.
U.S. officials hope those violations will spur European leaders into expanding the economic sanctions in place against Russian interests, which have hurt the country's economy but have not yet prompted a change in strategy from President Vladimir Putin.
"Russia has not changed its behavior," said Heather Conley, director of the Europe program at the Center for Strategic and International Studies
. "If anything, President Putin I think is doubling down on multiple fronts. And the cohesiveness feels like it's not there."
European leaders -- who also confront economic instability stemming from Greece's debt crisis -- will decide at a separate meeting later this month whether to continue their sanctions on Russia.
"Clearly President Putin's calculus has not fully shifted by any means," said Ben Rhodes, Obama's deputy national security adviser. He added that Western sanctions had delivered a "tremendous hit to the Russian economy."
"It's important that that pressure is sustained," he said.