MOSCOW, Feb 15 (Reuters) - A draft communique prepared for Group of 20 finance leaders will omit part of this week's Group of Seven statement declaring fiscal and monetary policy must only be used for domestic economic aims, a G20 delegate said.

It will merely stick to previous G20 language on the need to avoid excessive foreign exchange volatility.

The G20 leading economies intend to reaffirm their commitments to draw up credible medium-term fiscal plans but will also make allowance for the near-term economic situation facing some countries, a G20 delegate said after negotiations on Friday.

The key paragraphs of the draft hammered out after several hours of talks make no direct mention of fiscal targets, in response to U.S. pressure, and also do not repeat G7 language from earlier this week pledging not to target certain foreign exchange rates, the official said.

The currency market was thrown into turmoil this week after the Group of Seven powers - the United States, Japan, Germany, Britain, France, Canada and Italy - issued a joint statement stating that domestic economic policies must not be used to target currencies.

Tokyo said that reflected agreement that its aggressive monetary and fiscal policies were appropriate but the show of unity was shattered by off-the-record briefings critical of Japan.

Japan will not be singled out in the G20 draft communique wording, the delegate said.

(mike.peacock.thomsonreuters.com@reuters.net: +44 207 542 3784)

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