Mr Vajpayee, making his second visit to Cambodia in the past six months, said 'the first India-Asean summit is a logical progression of traditional links in line with contemporary opportunities and realities'.

Cambodian prime minister Hun Sen said trade and investment ties with India would help the newer and poorer members of Asean - Cambodia, Myanmar, Laos and Vietnam.

'Concerns were expressed over the threat that a two-tier Asean would emerge. Asean shared and continues to share this reality,' Hun Sen said.

On the final day of the summit, Japan also signed an agreement to establish a free-trade area with Asean within 10 years, spurred by a similar pact by China the day before.

Japanese Prime Minister Junichiro Koizumi insisted yesterday that he did not see China as a threat, instead applauding Beijing's new assertiveness as a sign of its desire to open markets and strengthen regional ties.

'That's a positive stance and I believe Japan should take it as a stimulus,' he said.

South Korean Prime Minister Kim Suk-soo also discussed a free-trade pact with Asean at the summit. In his meeting with the bloc's leaders, Mr Kim said that despite its interest, Seoul would take time to achieve a deal given domestic criticism of sudden price increases for marine and agricultural imports from Southeast Asia.

Meanwhile, Malaysian opposition continues to be a hurdle to Australia participation in Asean.

Diplomats said that Canberra had again asked Singapore to propose that Australia be allowed to join Asean, a request ritually rebuffed.

But, apparently at Singapore's suggestion, the regional bloc is considering a separate summit with Australia next year.

Asean ministers also discussed the threat of war in the Middle East, on which largely Muslim Malaysia and Indonesia have strong views.

'We are deeply concerned about the situation in the Middle East . . . a peaceful solution to end the worsening cycle of violence in Israel must be formulated,' said a summit statement.

South African President Thabo Mbeki's appearance at the summit came as a surprise to some participants. However, Cambodia's Foreign Affairs and International Co-operation Minister Hor Namhong explained it as the region's effort to establish contact with the newly created African Union, currently chaired by Pretoria.

Mr Mbeki said Africa sided with Southeast Asia's recently declared war on terror, and also warned against any unilateral action against Iraq.

'We trust that sense will prevail so that no country or combination of countries take it upon themselves to embark on unilateral action against Iraq,' he said. Iraq itself should co-operate fully with the UN Security Council, he added.

Mr Mbeki hoped to attract Asian countries to become partners in the union's development, particularly in infrastructure, agriculture, education and the environment.