Hopes that the G8 summit would set out a clear route map to end the bloody civil war in Syria have been dashed after Vladimir Putin, insisted he could not back a peace conference convened on the assumption that the Syrian president, Bashar al-Assad, would step down.

The prime minister, David Cameron, had been hoping for "a moment of clarity" at the summit in Lough Erne, Northern Ireland, so that world leaders could agree the terms of a peace conference leading to a transitional government with executive powers.

Sources said it was now unlikely that a peace conference would take place in July, since the Russian president could not agree with the other G8 leaders on the terms of a post-Assad cabinet. The Russians insist that both sides attending any peace conference should be able to choose their own delegations.

Cameron had pushed hard for an agreement at a working dinner on Monday night, and then returned to the issue for an unscheduled second time at a session billed to focus on counter-terrorism. Putin refused to shift despite pressure from all other members of the G8.

Russia, sponsors of the Assad regime, has for months said it can bring the Syrian government to the peace talks but refused to accept a precondition involving Assad's departure. The G8 communique is likely to focus on the need in principle for a political settlement, and a stepping up of humanitarian aid.

The French president, François Hollande, had hoped the G8 might be able to agree a date for the start of the Geneva talks, or the detailed terms of a political process.

The continued disagreement means the focus is likely to shift to the kind of arms Barack Obama is willing to give the Syrian opposition, and whether the British and French will follow suit. The US president has declared he is willing to step up arms supplies, but has given no details. Cameron is facing fierce resistance from the Liberal Democrats and his own party on the issue. Labour is also sceptical.

The Russian foreign minister, Sergei Lavrov, speaking in Kuwait, said holding the planned peace conference should not imply any capitulation on the part of the Syrian regime.

"We are categorically against … assertions that the conference should be some kind of public act of capitulation by the government delegation followed by a handing over of power to the opposition."

He said it was essential that the result of the conference should be a transitional government containing members of opposition groups and representatives of the current regime. Britain, the US and France have always said members of the Assad regime had to attend the talks, alongside the divided Syrian National Council.

Lavrov hit out at the west for undermining the realisation of the conference by giving material support to the rebels and beginning to call for a no-fly zone over Syria.

After painful discussions in Washington last week, Obama agreed to arm the rebels, partly to ensure the rebellion was not crushed by Assad and partly in response to intelligence showing the Assad regime had crossed "a red line" by using chemical weapons. The Russians and Assad continue to deny that chemical weapons have been used, accusing the US of fabricating evidence.

After a bilateral meeting between Putin and Obama on Monday night at Lough Erne, US officials held out hopes that Putin could distinguish between protecting the regime and protecting Assad. "The fundamental view expressed by Russia is not that this is all about Assad," they said. "To them, it's all about having a stable outcome. So in terms of who comes to the table, that type of discussion, it's certainly the case that you could have empowered representatives of the regime.

"It's our belief that we can get to an outcome in which there's an agreement for Assad to step down as part of that process because basically there's no way you can foresee, given what's happened, the opposition coming to terms with a leader who has been so abhorrent in the conduct he's carried out against his people – killing tens of thousands of people, including so many innocent civilians."

But in an interview broadcast on Monday, Obama was more gloomy, saying: "What's been clear is that Assad at this point, in part because of his support from Iran and from Russia, believes that he does not have to engage in a political transition, believes that he can continue to simply violently suppress over half of the population. And as long as he's got that mindset, it's going to be very difficult to resolve the situation there."

Even so, Obama portrayed himself as a reluctant participant: "We know what it's like to rush into a war in the Middle East without having thought it through," he said in obvious reference to the war in Iraq.

Hollande told French reporters on Monday: "My goal in this G8 is to make sure there can be a date or at least a process leading to the Geneva conference, which is to say a political solution."