KRUEN, Germany, June 7 (Reuters) - U.S. President Barack Obama told Prime Minister David Cameron he hoped Britain would keep military spending at 2 percent of national output, despite a need to cut his country's budget deficit, a British source said on Sunday.
Obama pressed Cameron on the sensitive subject in a bilateral meeting on the sidelines of a summit of the Group of Seven industrial nations in Germany amid concern in the United States that defence spending in its closest military ally could be poised to fall below the NATO target.
"They touched on 2 percent," the British source said. "The president underlined the importance of the UK and the US - we are the two pillars of NATO - and said he accepted the fiscal challenges but hoped that the UK would find a way to meet it."
The British government is holding a defence spending review and has declined to confirm that it will maintain spending at the NATO target level. (Reporting By Andrew Osborn; Editing by Paul Taylor)