By John Irishand Catherine Bremer

DEAUVILLE, France (Reuters) - Leaders of the Group of Eight began gathering in France on Thursday to endorse aid to new Arab democracies, but wrangling among Western and developing economies over who runs the IMF may take up much of their time.

Overnight violence in Yemen, one of several Arab states where veteran rulers have faced unprecedented popular uprisings, may also get attention -- the United States, a key sponsor of President Ali Abdullah Saleh, ordered all but essential diplomatic staff to leave the country as clashes intensified.

Officials from the G8 -- the United States, Canada, Britain, France, Germany, Italy, Japan and Russia -- had held preparatory talks on Wednesday in the seaside resort of Deauville to hammer out common positions on issues ranging from the world economy to Libya's civil war, Iran's nuclear goals and unrest in Syria.

Hosted by French President Nicolas Sarkozy, the summit runs until Friday. It is expected to approve a multi-billion-dollar aid package for Tunisia and Egypt, after "Arab Spring" uprisings deposed their autocratic leaders, and to seal an agreement to back others in the region who want democracy.

Protests against other allies of the West, notably in the oil-rich Gulf, are, however, unlikely to win clear assistance.

"We share a compelling interest in seeing the transitions in Egypt and Tunisia succeed and become models for the region," U.S. Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner wrote in a letter to the G8 on Wednesday.

"Otherwise, we risk losing this moment of opportunity."

IMF TENSION

G8 leaders arriving in the faded casino resort may have to fend off challenges to western Europe's grip on the post of managing director of the International Monetary Fund, the global lender. The position was left vacant by the dramatic departure of Dominique Strauss-Kahn, a Frenchman who is charged with the attempted rape of a New York hotel maid.

French Finance Minister Christine Lagarde announced she was standing for the post on the eve of the G8 summit, after securing the unanimous backing of the 27-nation European Union and, diplomats said, support from the United States and China.

"I think on the sidelines the G8 leaders will debate this question, even if Madame Lagarde will probably be the best candidate," Russia's envoy to France told Reuters, adding he did not believe his country would have any objections to her.

The IMF has promised a meritocratic process to replace Strauss-Kahn, a Socialist ex-finance minister who was favorite to defeat Sarkozy in a French presidential election next year.

It has set a June 30 deadline to pick a successor to the post, which has been held by a European since 1945.

But emerging-market nations are keen to push an alternative. Russian President Dmitry Medvedev and Finance Minister Pravin Gordhan of South Africa -- one of 10 African nations invited to the Normandy resort -- are likely to defend the BRICS' stance.

Medvedev is also likely to outline his concerns over Libya, where more than two months of NATO air strikes have failed to dislodge leader Muammar Gaddafi.

Russia, a critic of the military intervention, wants to push its own ceasefire plan after welcoming envoys of both Gaddafi and the opposition to Moscow for talks.

"Let me make it clear, Russia does not want Gaddafi to stay in power," Orlov said. "He has committed crimes and must take responsibility for those, but in the political transition process, we want all parties to take part.

"Russia is ready to play the role of mediator if other countries are ready, but to do that we must have a ceasefire."

(Editing by Alastair Macdonald)