Rome, Italy – US officials are working to gain European allies' support for a plan to present at the upcoming G7 summit, regarding utilizing the interest from frozen Russian assets to aid Ukraine.

With the meeting in southern Italy beginning on Thursday, negotiations are ongoing.

Several European nations are not fully persuaded about the US-led proposal, diplomatic sources revealed to Al Jazeera.

Following Russia's invasion of Ukraine in February 2022, Western allies froze approximately $260 billion of Russian state assets, most of which are within the European Union.

One proposed solution involves a $50 billion loan to Ukraine, using the interest generated from these Russian assets, which amounts to roughly $3.7 billion annually. However, there are substantial financial and logistical concerns.

The US seeks assurances that the interest will remain available. Washington's worries are amplified by the fact that the decision to freeze these assets requires unanimous renewal by all EU members every six months. If any EU nation, such as Hungary with its connections to Russia, opposes, the US might not have the funds to repay the loan.

There is also the possibility that if a peace negotiation occurs and Russia regains its assets, the responsibility for the remaining loan becomes unclear. The EU and G7 countries are discussing how to distribute the potential risk.

Opinion within the EU is divided. While Germany and France are sceptical, the EU Commission and Council are also not entirely convinced, diplomatic sources told Al Jazeera.

A third source indicated that there is political will to reach an agreement at the summit, even if technical issues still need resolution.

Should these issues not be resolved by the summit's end, efforts would continue to convey that negotiations are ongoing, they said.

“This is a priority for the United States. We believe it’s a priority for the entire G7,” US President Joe Biden’s national security adviser, Jake Sullivan, mentioned last week. “We want to see every country align with a strategy to mobilize resources for Ukraine effectively, ensuring they have what they need to succeed in this war.”

The initial idea of seizing the assets outright faced resistance, as it would have unprecedented implications in international law and could undermine trust in the euro as a global reserve currency.

Russian President Vladimir Putin responded by empowering Russian authorities to control US-owned property in Russia to counter future asset seizures.

The concept of a US-provided loan emerged as a compromise, despite the significant difference in amounts between seizing the assets and utilizing their profits – from $260 billion to $50 billion.

Nonetheless, a final agreement or statement of intent would demonstrate a unified stance against Russia, observers suggest.

“The US aims to bring a viable outcome to the G7 – so there will be a deal, albeit with many conditions,” noted Marta Dassu, director of European affairs at the Aspen Institute and former deputy foreign minister of Italy.

This year's G7 in Europe focuses on the Russia-Ukraine conflict, marking a more politically charged agenda compared to the traditional economic themes, Dassu stated.

Upcoming US presidential elections also play a role, with potential significant implications for Ukraine should former President Donald Trump win. Recent military aid to Ukraine, valued at $61 billion, faced extensive debate in the US Congress, indicating further challenging discussions even if Biden remains in office.

The G7 summit accordingly holds critical importance for Ukraine, particularly with ongoing delays in US military support contributing to Russian territorial gains.

Ukrainian President Volodymyr Zelenskyy will be present in Puglia on Thursday, as Ukrainians currently face a challenging battle against advancing Russian forces.

Observers believe a $50 billion loan could secure Ukraine's funding through 2025, regardless of the US election outcome in November.