"This should become the starting point for resolving all other problems," Vladimir Putin said.
Israel launched a military operation in Lebanon after the radical Hizbollah movement took two Israelis hostage on Wednesday. At least 55 Lebanese civilians were killed. Israeli aircraft also bombed the Gaza Strip.
Putin condemned hostage taking as means of resolving problems, and the use of force in response to such actions.
"We will urge all the sides involved in the conflict to stop bloodshed immediately," he said.
Putin said he planned to discuss the issue with U.S. President George W. Bush, who has just arrived in St. Petersburg, and with other G8 leaders on Saturday.
The president said all military operations resulted in loss of life. "This is always a tragedy. And if there is a way to resolve a problem without resorting to force, this is optimal. In this case, we are facing a different situation," he added.
The leaders of the United States, the United Kingdom, Japan, Italy, Germany, Canada and France will be joining Russian President Vladimir Putin for Russia's debut G8 summit in the country's second largest city on July 15-17.
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Islamic terrorism is gaining momentum, and is all about ideological opposition to European Christian values. This is an aggressive young radical ideology that attracts followers across the world. And it will only grow stronger on the world political stage.