Clinton reassures SE Asia, Muslims in Indonesia

(Recasts, adds new Clinton quotes, departure, details)

By Muklis Ali and Arshad Mohammed
JAKARTA, Feb 19 (Reuters) - U.S. Secretary of State Hillary Clinton told Indonesia on Thursday that Washington would not neglect Southeast Asia and addressed anger in the predominantly Muslim country over U.S. policy in the Middle East.

Clinton also discussed economic cooperation and efforts to reach a new global agreement on climate change with President Susilo Bambang Yudhoyono during her 24-hour sidetrip to Southeast Asia's biggest economy, before heading for South Korea for meetings on the North's military threat.

After meeting Yudhoyono, Clinton said the United States had neglected Southeast Asia and that her decision to visit Indonesia on her first trip abroad in her new job aimed to redress that.

"We don't want to be absent," she told local journalists.

"We want to be present."
Some Southeast Asian nations felt Washington had not paid the region enough attention under President George W. Bush, allowing China to fill the vacuum.

Clinton was given a welcome more typical of a head of state. Yudhoyono, who is seeking re-election in July, greeted her outside his office in the white colonial-style presidential palace in Jakarta before the two went in for talks.

"The president underlined that a global consensus (on climate change) cannot be achieved without U.S. leadership," presidential spokesman Dino Patti Djalal told a news conference afterwards.

MIDDLE EAST
Earlier, Clinton made small talk on a popular music TV show and toured U.S.-funded aid projects as she tried to improve America's image in Indonesia, a country where many of the Bush administration's policies, including the 2003 U.S.-led invasion of Iraq, were deeply unpopular.

Appearing on "Dahsyat" ("Awesome"), a local youth music show, Clinton got a cheer when she said the Beatles and the Rolling Stones were among her favourite musicians, but she politely declined an offer to sing herself.

She also fielded questions about the anger of Indonesians at U.S. policy in the Middle East, saying Obama had decided to push hard for Israeli-Palestinian peace despite the challenges of ending the six-decade conflict.

"We are going to work very hard to try to resolve what has been such a painful, difficult conflict for so many years ... so that Israelis and Palestinians can live in peace."

Clinton confirmed that she would attend a conference on rebuilding Gaza in Cairo on March 2.

Clinton, like Bush Administration officials in the past, held up Indonesia, the world's most populous Muslim country, as proof that modernity and Islam can co-exist as she visited the country where Obama spent four years as a boy.

She lavished praise on Indonesia for its transformation from an autocracy under former President Suharto -- who was forced to resign in 1998 -- to a vibrant democracy.

Her talks also covered the financial crisis, and Indonesian Foreign Minister Hassan Wirajuda said on Wednesday that Jakarta had discussed the possibility of U.S. assistance in the form of a currency swap agreement and possible contingency funding.

Indonesia is already seeking to extend a $6 billion currency swap arrangement with Japan and has similar deals, each worth $3 billion, with China and South Korea.

Clinton is due to arrive in Seoul later on Thursday.

North Korea has repeatedly threatened in recent weeks to reduce the South to ashes and on Thursday said it was ready for war. ([nSEO183387])

Pyongyang is thought to be readying its longest-range missile for launch in what analysts say is a bid to grab the new U.S. administration's attention and pressure Seoul to ease up on its hard line. Clinton has said such a launch would not help relations.

After South Korea, Clinton will go to China, the last stop on an Asian tour that also included Japan. The trip is her first outside the United States since taking office.([nHKG218352]) (Additional reporting by Sunanda Creagh, Olivia Rondonuwu and Telly Nathalia) (Writing by Ed Davies; Editing by Bill Tarrant)