"We should seek to prevent any miscalculation or mishap which will set the region back for many years," Lee told a dinner of business leaders after talks at the White House with Obama.

Singapore, while a long-standing US partner, has pursued friendly relations with China. Lee said he believed there was "enough common ground" for the two Pacific powers to accommodate each other's interests.

"The US, as the incumbent superpower who will remain dominant for decades to come, naturally has interests to protect," he said.

China nonetheless "wants its rightful place in the sun" and will be "wary of any perceived attempt to conscribe its freedom of action", Lee said.

Relations have worsened between China and Japan over the Diaoyu Islands in the East China Sea, while Vietnam and the Philippines have led Southeast Asian criticism of Beijing for heavy-handedness in South China Sea disputes.

Tensions in East Asia have soared in recent weeks due to a crisis with North Korea, which tested a nuclear bomb in February and has threatened to attack the United States over what it calls hostility.

Singapore has given the green light for the temporary deployment of four combat ships, which are meant to project US power in shallow coastal waters.

The first of the vessels, the USS Freedom, is on its way across the Pacific.

"We have extremely close military co-operation," Obama said as he met Lee at the Oval Office, praising the Southeast Asian state as "one of the most successful countries in the world".

Singapore has traditionally been a key source of advice and interpretation of events in Asia, particularly in China, for US administrations, and Obama said that Lee had been especially helpful to him.

"Personally, there are very few world leaders who I am more appreciative of in terms of their advice, counsel and thoughtful analysis than Prime Minister Lee," Obama said.

The meeting focused on regional security challenges as well as trade, with Singapore and the United States key players in the evolving Trans-Pacific Partnership pact.

Lee, in an address to the US Chamber of Commerce and US-Asean Business Council, called on the United States to pursue a "more active trade agenda" despite the political pitfalls for Obama at home.

"In Asia, trade is strategy. A more active trade agenda will benefit the US economically and strategically," Lee said.

He called Southeast Asia a huge market for the United States, saying that the world's largest economy enjoyed advantages thanks to its creative innovation.