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By Patricia Zengerle and Bill Tarrant
SINGAPORE (Reuters) - U.S. President Barack Obama called for the release of Myanmar opposition leader Aung San Suu Kyi when he met the country's prime minister at a meeting with other Southeast Asian leaders in Singapore on Sunday.
Obama shook hands with Myanmar Prime Minister Thein Sein at the meeting in Singapore's Shangri-la hotel with the 10 leaders of the Association of Southeast Asian Nations (ASEAN), the first ever with a U.S. president.
The United States has begun to re-engage with Southeast Asia after years of relative neglect that left China to increase its diplomatic and economic heft in the region.
Speaking to reporters after the meeting, Obama said he reiterated his offer to Myanmar of better ties with Washington if it pursued democratic reform and freed political prisoners, including opposition leader Aung San Suu Kyi.
"I reaffirmed the policy that I put forth (Saturday) in Tokyo with regard to Burma," Obama said.
Thein Sein expressed his appreciation that Washington had decided to re-engage with Myanmar, saying: "It will be a new chapter in the relationship to all the countries in the region," ASEAN Secretary-General Surin Pitsuwan quoted him as saying.
The meeting marked the first time a U.S. leader had met his counterparts in the 42-year-old grouping, founded at the height of the Vietnam War. It took place after an Asia-Pacific summit.
Washington has recently taken a two-prong approach to the former Burma, engaging the junta while keeping sanctions on the resource-rich nation that shares borders with India and China.
For years, ASEAN was heavily criticised in the West for its own fruitless engagement policy with Myanmar's generals. Now it is hoping that with U.S. support, Myanmar, under military rule since 1962, can be guided back to democracy.
By refusing to deal with ASEAN because of Myanmar, the United States limited its involvement on a range of issues in Southeast Asia, said Ernie Bower, Southeast Asia Program director at the Centre for Strategic and International Studies in Washington.
"China has been greatly enjoying U.S. disengagement in Southeast Asia for the past 10 years, while the Chinese themselves have been deeply engaged."
"FREE, FAIR, INCLUSIVE"
In a joint statement, the leaders said they hoped the U.S. engagement policy "would contribute to broad political and economic reforms" and said next year's elections "must be conducted in a free, fair, inclusive and transparent manner in order to be credible to the international community."
It did not, however, mention Suu Kyi or call for the release of political prisoners.
Suu Kyi has been detained for 14 of the past 20 years, but recently has been allowed to meet U.S. diplomats. She has expressed hopes those contacts would lead to democratic reforms.
Obama was the first president since Lyndon Johnson in 1966 to even be in the same room as a top Myanmar leader.
Obama, who lived in Jakarta as a boy and who has pronounced himself America's "first Pacific President," has led his administration to take a renewed interest in ASEAN, home to 570 million people with combined economic output of $1.1 trillion (660 billion pounds).
"As the first U.S. president to have a personal connection to the region, I reaffirmed to my ASEAN friends that the United States is committed to strengthening its engagement in Southeast Asia," Obama said after the meeting.
Washington routinely sent lower level officials to ASEAN meetings under former President George W. Bush, in part at least because a junta member was part of the ASEAN pageantry.
Obama said he expressed support for ASEAN's ambition to become an EU-style community by 2015.
The statement noted that ASEAN is host to $153 billion in U.S. direct investments -- more than any other region in Asia -- and two-way trade reached $178 billion in 2008.
China's investments in ASEAN countries, by contrast, had totalled around $2 billion by 2002, according to official data, but were growing at a more rapid rate, as Beijing scours the world for resources to feed its rapidly growing economy.
The leaders also discussed many other issues including climate change and clean energy, transnational crimes, terrorism, trade, the G20, nuclear nonproliferation and North Korea.
(Additional reporting by Nopporn Wong-Anan; Editing by Neil Chatterjee)