At a New York summit, Obama said the 10-member Association of Southeast Asian Nations (ASEAN) had the potential for true world leadership, pressing home his plan of rebuilding US power in the dynamic region.

Both sides agreed on the importance of "peaceful resolution of disputes" and "freedom of navigation" including in the South China Sea, a reference to tensions between several ASEAN members and Beijing over territorial claims.

The summit also took place at a time of aggravated Chinese tensions with traditional rival and cornerstone US-ally Japan over a separate territorial dispute in the East China Sea.

China had warned the United States ahead of the summit between ASEAN and Washington not to get involved in the row over the potentially resource-rich Spratly and Paracel islands in the South China Sea which Bejing claims.

However, ASEAN members the Philippines, Vietnam, Malaysia, Brunei, plus non-member Taiwan have competing claims.

There was no mention in a US statement on the talks, nor a joint communique of a call made by US Secretary of State Hillary Clinton in July for multilateral talks on regional security rows -- an idea China opposes.

Opening the talks, Obama made clear he saw Asia as a vital plank of his foreign policy.

"As president, I've... made it clear that the United States intends to play a leadership role in Asia," Obama said.

"So we've strengthened old alliances, we've deepened new partnerships, as we are doing with China, and we've reengaged with regional organizations, including ASEAN," Obama said at the summit at the Waldorf Astoria hotel.

Obama also confirmed he would attend the East Asia summit next year in Jakarta as he presses home a strategy of enhancing US influence in the dynamic region, which he believes has been neglected by recent American policy.

"ASEAN countries are increasingly playing a leadership role in the region. ASEAN itself has the potential to be a very positive force in global affairs," Obama said.

Vietnam's President Nguyen Minh Triet said ASEAN was keen to take its relations with Washington to "the next level" to sustain peace, stability and development in the region.

On the economic front, the two sides agreed to work together to expand a burgeoning trading relationship -- two way ASEAN-US trade in goods reached 84 billion dollars in the first six months of this year, a rise of 28 percent over last year.

They also discussed counter-terrorism and efforts to halt narcotics trafficking, pledged to fight against nuclear proliferation and reaffirmed the need for peaceful solutions to the Iran and North Korea nuclear challenges.

The White House also said that Obama raised the issue of Myanmar at the talks, after Washington admitted it was disappointed with its efforts to use dialogue to promote democratic change in the military-ruled state.

"The president believes in the importance of democratic reform and protection of human rights and renews his call on Burma to embark on a process of national reconciliation," the US statement said.

Obama called for the release of all political prisoners including pro-democracy leader Aung San Suu Kyi and for free and fair elections in November.

In the communique, ASEAN leaders also called for free elections, and welcomed US engagement with Myanmar, hoping it would encourage the military government to undertake political and economic reforms.

On Thursday, Obama announced that he would visit Indonesia in November, after being forced to cancel two previous attempts to make the trip to the world's largest Muslim-majority nation.

The visit will follow a stop in India and come before Obama heads to South Korea and Japan.

Friday's New York meeting follows the inaugural summit that Obama held last year in Singapore with his counterparts from 10-member ASEAN.

Next month, in a further deepening of US ties with the region, Clinton will attend this year's East Asia Security summit in Hanoi.

ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. The East Asia summit groups ASEAN with Australia, China, India, Japan, New Zealand and South Korea.

earlier related report
China demands compensation after skipper returns from Japan
Beijing (AFP) Sept 25, 2010 - Beijing on Saturday demanded an apology and compensation from Tokyo over the "unlawful" detention of a Chinese trawlerman that sparked a major row, despite Japan's decision to release him.

In a far from conciliatory statement, China's foreign ministry said the disputed islands at the centre of the diplomatic standoff were Beijing's "inherent territory" and Tokyo's actions were illegal and invalid.

"(The arrest) seriously infringed upon China's territorial sovereignty and violated the human rights of Chinese citizens," the ministry said in a brief statement.

"Japan's detention, investigation or any form of judiciary measures for the Chinese trawler and fishermen are unlawful and invalid," it said, adding: "The Japanese side must make apology and compensation for the incident."

But Japan had turned down the demand, a report in Tokyo said, as the government there faces accusations that it caved in to bullying by China when it decided on Friday to release the trawler captain.

Prosecutors "came to their judgment in compliance with their duty on the basis of Japanese domestic law" Japanese Prime Minister Naoto Kan told reporters when asked for his view on the decision to release the trawlerman.

"In any case, China and Japan are important neighbours," Kan said in New York on the sidelines of the UN General Assembly.

Japanese prosecutors cited the deepening rift between Beijing and Tokyo in their decision to release the skipper, who was arrested after his boat collided with two Japanese coastguard vessels in the East China Sea.

Zhan Qixiong, 41, had acted on the spur of the moment and not committed a premeditated criminal act and had no prior criminal record in Japan, said Naha district deputy chief prosecutor Toru Suzuki in a televised press conference.

Chinese state television showed Zhan receiving a hero's welcome after the government-chartered plane sent to fetch him touched down at Fuzhou, capital of the southeastern province of Fujian, in the early hours of Saturday morning.

Making victory signs with his fingers and clutching a bunch of flowers, a smiling Zhan was greeted by his wife, son and government officials.

"I am thankful to the party, the government and my fellow citizens for my peaceful return," Zhan told reporters.

"My detention by Japan was illegal. The Diaoyu Islands are part of Chinese territory. I firmly support the Chinese government's position."

The row started when Japan's coastguard arrested the captain on September 8 after his trawler collided with two of their patrol boats near a disputed island chain, called Senkaku by Japan and Diaoyu by China.

In the ensuing spat, China issued a series of harsh diplomatic protests, summoned Japan's ambassador Uichiro Niwa six times, once after midnight, and cancelled official visits, energy talks and joint cultural events.

Japan on September 13 released the ship's 14 Chinese crew and allowed them to fly home on a Chinese government-chartered plane, but on the same day Beijing protested over the skipper's continued detention.

Chinese Premier Wen Jiabao this week weighed in and threatened "further actions" as Japanese traders reported China had blocked exports of rare earth metals, used in products from iPods to electric cars, a claim Beijing denied.

Further ramping up tensions, China this week detained four Japanese nationals who were working on a bid for a project to clear up chemical weapons left from the Japanese occupation before and during World War II.

Japanese officials were yet to meet the four workers and were not sure of their exact location, a spokesman for the embassy in Beijing told AFP.

Chinese state media warned on Saturday that the dispute -- the worst in years between the two Asian giants -- had caused "long-lasting" damage to delicate Sino-Japanese relations.

An editorial in the Global Times newspaper said China should "remain cold towards Japan for a while" to send a clear message to Tokyo that "irresponsible policies have consequences".

Analysts said the trawler captain's release was seen boosting China's communist leaders at home, where the case sparked strong nationalist sentiment among a domestic audience still sensitive about Japan's past militarism.

However, Japanese media warned his return to China gave the impression that Tokyo's young centre-left government will yield to diplomatic pressure.

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