UPDATE 1-Dollar discomfort thrust onstage for Italy summit

* Summit expected to voice cautious optimism on economy

* Crisis exit strategy remains a flashpoint, sources say

* China wants global reserve currency discussion

* Officials play down reserve currency debate

* Italy urges global conduct charter in business/finance

(Updates with China vice foreign minister He Yafei quotes)

By Brian Love

PARIS, July 5 (Reuters) - World leaders are bound to express the hope that the worst of the global economic crisis is passing when they meet this week, but they are under pressure, too, to manage a Chinese challenge to decades of dollar supremacy.

Beijing, which has floated the idea of an alternative to the dollar as world reserve currency one day, wants a debate on the matter -- sensitive in financial markets that are wary of risks to U.S. asset values -- at a July 8-10 summit in Italy, officials say.