The G7 leaders agreed on the need for a global response to tackle the migration and refugee crisis, committing to increase funding and calling for more legal channels of migration, in a joint statement issued Friday.

The leaders, meeting in the Japanese resort of Ise-Shima, also discussed economic challenges at their two-day summit, alongside trouble hotspots including in Russia and the South China Sea.

The European Union, which attends the G7 meetings by invitation, had pushed for migration to be a priority at the meeting of leading industrialized nations. The bloc was overwhelmed by a surge of more than 1 million migrants reaching Europe last year.

"The G7 recognizes the ongoing large-scale movements of migrants and refugees as a global challenge which requires a global response," the leaders said, adding that they "commit to increase global assistance to meet immediate and longer-term needs of refugees ... as well as their host communities."

Their joint statement calls for international financial institutions and donors to up their assistance, while asking the World Bank to develop tools for countries hosting refugees and welcoming efforts by the European Investment Bank.

Many of those on the move are fleeing conflict and Islamic State terrorism in Syria and Iraq.

The leaders pledged to mobilize 3.6 billion dollars in aid for Iraq, aimed in part at helping the country fight terrorism and the causes of migration, according to German Chancellor Angela Merkel.

The funding, which is primarily intended to help Iraq address fiscal challenges and carry out economic reforms, includes 500 million euros (560 million dollars) in previously announced German credit, Merkel said.

Global economic instability was the official headline topic at the summit, hosted by Japan, with President Shinzo Abe seeking backing for his domestic efforts to boost Japan's languishing economy with fiscal stimulus. Germany in particular is opposed to the approach.

The joint text on how best to boost the economy proved the most contentious, an EU source said on condition of anonymity. The G7 finally agreed to "reaffirm the important role of mutually reinforcing fiscal, monetary and structural policies."

The leaders weighed in on Britain's upcoming referendum on EU membership, warning of the risks of Brexit, or departure from the European Union.

"A UK exit from the EU would reverse the trend towards greater global trade and investment, and the jobs they create, and is a further serious risk to growth," their statement says.

They also discussed the conflict in eastern Ukraine, where Russia is accused of supporting pro-Moscow separatists.

The leaders remained firm regarding sanctions on Russia, noting that their lifting would be "clearly linked" to the full implementation of a peace deal for eastern Ukraine, and warning that they could be ratcheted up if Moscow fails to do its part.

The G7 summit was wrapping up Friday with an outreach meeting involving the leaders of Bangladesh, Indonesia, Papua New Guinea, Sri Lanka and Vietnam, as well as a session including Chadian President Idriss Deby, whose country holds the African Union presidency.

The G7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States, while the EU is also at the table.

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