KRÜN, Germany—Leaders of the seven largest industrialized countries arrived for a summit in which their governments aimed to preserve a united front on Russian sanctions and find ways to avoid an escalation of Greece’s debt crisis.

Both the conflict in Ukraine and the standoff between Athens and its creditors—which could lead to a Greek default if negotiators fail to reach a deal to unlock aid for Greece—dominated much of the first day of the summit in the Bavarian Alps.

President Barack Obama arrived a few hours early on Sunday to meet with German Chancellor Angela Merkel to discuss both issues. Most of the meeting, U.S. officials said, was focused on Ukraine, with the president urging Ms. Merkel to extend European Union sanctions against Russia before they expire this summer.

It appeared European leaders were gearing up to do just that. “Given the current situation, if anybody wants to start debate about changing the sanctions regime, the discussion could only be about strengthening it,” European Council President Donald Tusk, who represents EU heads of state and government, said at the Bavarian luxury resort Schloss Elmau, where the summit is taking place.

The leaders who gathered for the summit—from the U.S., U.K., Germany, France, Italy, Canada, and Japan—held talks on the world economy on Sunday afternoon. At dinner, they focused on foreign policy, a discussion dominated again by Russia and Ukraine, a person familiar with the matter said. They plan to address a range of issues Monday, including climate policy, in preparation for a key United Nations climate conference that starts in November.

In their meeting, Mr. Obama and Ms. Merkel also discussed Greece’s bailout, an issue that has divided Europe amid Germany’s push for austerity in the crisis-stricken country.

The two leaders agreed that Greece and its partners should chart a way forward that builds on structural reforms and returns the country to a path of long-term growth, White House press secretary Josh Earnest said. The hope is that Greece and its partners can accomplish that without causing undue volatility in the global financial markets, he said.

The Obama administration has also been urging Greece and its main creditors—the rest of the eurozone and the International Monetary Fund—to come to an agreement over terms for much-needed financing for Greece, fearful of global economic repercussions if the country were to default on its debt. Mr. Tsipras struck a defiant tone in a speech to his parliament on Friday, calling a proposal by the country’s creditors irrational.

The government in Athens has been waiting for months on a €7.2 billion ($8.05 billion) payment from its €245 billion international bailout program. Greece, which is fast running out of cash, likely needs some sort of help this month to repay a set of IMF loans that are falling due. European officials say Athens probably can’t pay the entire amount unless it gets fresh financing in some form.

Washington’s ties with Berlin are playing a central role at the summit as the U.S. is looking to Germany to help rein in Russia’s intervention in Ukraine and to avoid a showdown over Greece’s bailout that U.S. officials fear could damage the world economy. The president praised Ms. Merkel and the U.S. relationship with Germany, calling it “one of the strongest alliances the world has ever known.”

Mr. Obama, in his appearance alongside Ms. Merkel, reached out to a German public that surveys show has grown more skeptical of the alliance with the U.S. and has been upset about revelations of National Security Agency surveillance here.

He greeted the crowd gathered to see him with the Bavarian greeting “Grüss Gott!”, joked about having forgotten to bring his Lederhosen, and sat down at a Biergarten-style table for wheat beer and white sausages with Ms. Merkel, her husband and locals in traditional Bavarian garb. “My message to the German people is simple: We are grateful for your friendship, for your leadership,” Mr. Obama said. “We stand together as inseparable allies in Europe and around the world.”

Mr. Obama didn’t address the issue of surveillance in his brief speech, and the White House said the issue didn’t come up in his 45-minute meeting with Ms. Merkel.