TAORMINA, Italy (AFP) - G-7 leaders met on Friday (May 26) with divisions on trade and climate change, and fresh friction surrounding United States President Donald Trump, threatening to undermine a show of unity against Islamist terrorism.

"There is no doubt that this will be the most challenging G-7 summit in years," European Union president Donald Tusk predicted, setting the tone for the two-day meet in Sicily's ancient hilltop resort of Taormina.

The meeting comes days after children were among 22 people killed in a concert bomb attack in Manchester.

British Prime Minister Theresa May was to lead a discussion on terrorism with her aides saying she would issue a call for G-7 countries to put more pressure on Internet companies to ensure that extremist content is quickly taken offline and notified to the authorities.

With the Islamic State in Iraq and Syria (ISIS) group on the retreat in Iraq and Syria, "the fight is moving from the battlefield to the Internet", Mrs May was expected to tell her colleagues before flying home early to oversee the ongoing "critical" security situation in Britain.

US officials acknowledged they were expecting a difficult discussion on trade after reports that Mr Trump had described the Germans as "bad, very bad" and vowed to stop them selling millions of cars in the US, during a meeting with senior EU officials in Brussels on Thursday.

There was no immediate US reaction to the reports, based on leaks to German media, but European Commission president Jean-Claude Juncker confirmed Mr Trump had raised the issue.

"He did not say the Germans were behaving bad. He said we have a problem," Mr Juncker told reporters, while insisting Mr Trump "was not aggressive at all".

Mr Trump's economic adviser Gary Cohn told reporters travelling to Sicily with the President that trade would be a "big topic".

"We are going to continue to fight for what we believe is right, which is free, open and fair trade, which the President has been very clear on what that means," Mr Cohn said. "We will have a very robust discussion on trade."

With Mrs May and Mr Trump among four new faces in the club of the world's major democracies, the gathering in Italy was billed as a key test of how serious the new US administration is about implementing its radical policy agenda, particularly on climate change.

Senior officials are preparing to work through the night of Friday to Saturday in a bid to bridge what appear to be irreconcilable differences over Mr Trump's declared intention of ditching the US commitment to the landmark Paris accord on curbing carbon emissions.

Officials acknowledge the summit is effectively about damage limitation against a backdrop of fears among US partners that the Trump presidency, with its America First rhetoric, could undermine the architecture of the post-World War II world.

For Mr Trump, who touched down at a US military airbase near the summit venue late on Thursday, the talks will be the final leg of his first presidential foray overseas.

The gruelling week-long trip briefly diverted attention from domestic concerns focused on alleged campaign collusion with Russia.

But that issue reared up again overnight as it emerged that the FBI is examining his son-in-law Jared Kushner's contacts with the Russian ambassador in connection with the probe of alleged interference in the election campaign by Moscow.

US officials had hoped the globe-trotting trip would enable Mr Trump to position himself as a more statesman-like figure and he enjoyed largely positive coverage on his stops in Saudi Arabia, Israel and the Palestinian territories, and at the Vatican.

But some of that has been undone by now-viral images of the billionaire tycoon shoving his way past other leaders at a Nato summit in Brussels on Thursday, and by his reported comments on Germany.

The other new face is France's youthful president, Mr Emmanuel Macron, who has vowed to defend the Paris climate change deal agreed in 2015.

Mr Macron met Mrs May just before the summit and promised that France would do "everything we can" to help Britain in the fight against terrorism, the two leaders putting the vexed issue of Britain's pending departure from the European Union to one side.

On climate change, the effort to keep Mrs Trump on board will focus on convincing his team that developing renewable energy forms and technology to facilitate cleaner fossil fuels can be drivers of the job-creating growth that he says is his priority.

"If we do it right, climate protection and growth go hand in hand - and then it is not really important if it is a man-made problem or not," said a German source.

Mr Cohn said US compliance with its Paris commitments would be "crippling" to economic growth, but added the President was "interested to hear what the G7 leaders have to say about climate".

Japan was hoping to use the summit to push North Korea up the international agenda with Prime Minister Shinzo Abe set to warn that the unpredictable regime in Pyongyang, "is a grave threat not only to East Asia but also to the world".

Mr Abe met Mr Trump privately before the summit with the US leader bullishly promising the problem "will be solved".