There was no agreement reached on climate change, but President Donald Trump did not commit to abandoning the Paris climate accord as he promised during his election campaign.
A summit of G7 leaders on Friday failed to make progress on narrowing differences between the United States and its partners on climate change, hosts Italy said.
With President Donald Trump still reviewing the US position, Washington is resisting intense pressure to commit to remaining within the framework of the 2015 global accord on curbing carbon emissions.
"The question of the Paris climate accord is still hanging," Prime Minister Paolo Gentiloni told a news conference after the leaders held talks on the issue.
TRT World's Francis Collings has this report.
Merkel described the climate debate as "controversial". There was a "very intensive" exchange of views, she said.
Gary Cohn, Trump's economic advisor, said the president had told his colleagues that he regarded the environment as important.
"His views are evolving, he came here to learn," Cohn said. "His basis for decision ultimately will be what's best for the United States."
Gentiloni had gone into the summit acknowledging deep divisions but hoping for some sign of flexibility from the US.
Trump campaigned on a pledge to ditch the United States commitment to applying the 2015 Paris deal, which seeks to curb global warming by cutting carbon emissions. The United States is the world's biggest emitter after China.
He has yet to act on his threat, having said he would listen to what US partners have to say before making a decision on how to proceed.
Abandoning the Paris agreement would carry a high political cost in Europe and China, where the deal is considered a bedrock of action on climate change, analysts say.
It would also be fiercely opposed at home by the US environment lobby and by American corporations that are now investing heavily in cleaner technology.
The stalemate on climate change was mirrored by divisions between the US and the other six G7 countries over trade and migration at the annual summit, described by officials as the toughest in years.
The meeting is due to conclude on Saturday with a final statement which Italian officials have indicated will be a fifth of the originally planned length -- if it can be agreed at all.
Officials were due to work through the night in an attempt to reach a compromise on the text.