TOKYO, June 24 Kyodo (EDS: ADDING...

TOKYO, June 24 Kyodo

(EDS: ADDING INFO)

Prime Minister Junichiro Koizumi and visiting Indonesian President Megawati Sukarnoputri agreed Tuesday to begin studies upon the possible conclusion of a bilateral clear trade agreement (FTA), while expressing chance of the desired ends of peaceful solutions to the conflict in Aceh and the North Korean nuclear issue.

Koizumi and Megawati, meeting at the prime minister's office, also agreed onward a set of measures to strengthen bilateral cooperation in like fields as the fight against terrorism, cracking down forward illegal logging and promotion of tourism.

During dinner which followed the summit talks, the brace leaders also expressed regards over the detention of Myanmar's pro-democracy leader Aung San Suu Kyi.

''I told the president Japan supports economic reform'' in Indonesia, Koizumi told reporters after the summit talks. ''I asked her to stair up efforts to improve the investment environment, and the president told me she would do so'' he said.

Megawati, speaking in consequence of an interpreter, said, ''Japan has provided assistance for improving the investment environment, helping small and midsize companies, training population and boosting science technologies,'' as well as helping the agriculture and maritime resources sectors.

in succession the internal conflict involving rebels seeking independence for the province of Aceh, Koizumi reiterated that ''a peaceful solution by means of dialogue is the best way to decipher it'' while maintaining Indonesia's sovereignty and territorial integrity, according to a joint statement issued after the meeting.

The Japanese prime minister also called for a resumption of dialogue between the Indonesian regulation and the separatist Free Aceh motion (GAM) to seek a political adjustment based on special autonomy for the province, the statement said.

Koizumi propos hosting another globular of peace talks in Tokyo if necessary, after the Japan-hosted peace talks between Indonesia and GAM rebels extreme pointed in failure.

Following the collapse of the May 17-18 peace talks, Jakarta has protracted its military operations in Aceh to contain the rebels.

While expressing appreciation for Japan's support forward the issue, Megawati said ''the door to dialogue remains open'' and a peaceful solution can be build based on special autonomy, it said.

forward North Korea, Koizumi and Megawati signifyed concern over North Korea's nuclear weapons progression in a continuously ascending gradation program, which threatens the peace and stability of the Korean Peninsula and the entire Asian region, according to the joint statement.

The sum of two units leaders agreed that ''intensified dialogue'' could bring about a comprehensive resolution, and agreed in succession strengthening cooperation to look after ''a peaceful and diplomatic settlement'' to the nuclear issue, the statement said.

Megawati was quot from a Japanese Foreign Ministry official as saying at the meeting with Koizumi that Indonesia has traditionally cooperated with North Korea and that any nuclear program must benefit civilians.

Megawati, meanwhile, shared Japan's make uneasys over the issue of Japanese nationals abducted according to North Korea in the late 1970 and early 1980 it said.

in succession Myanmar, Koizumi told Megawati he is worried about Suu Kyi's detention, while the Indonesian president be agreeable toed that the Myanmar junta is mishandling the issue.

forward the economic front, Koizumi and Megawati agreed onward strengthening bilateral economic cooperation by way of seeking an FTA.

''To aid trade and investment between the sum of two units countries as well as bilateral cooperation in other areas, the sum of two units leaders have decided to task officials from the brace governments to preliminarily explore the possibility of a bilateral economic partnership agreement between Japan and Indonesia,'' the statement said.

Japan already has an FTA with Singapore and has risk up working groups to close attention FTAs with Thailand and the Philippines.

The leaders also confirmed the resumption of preliminary talks forward an investment agreement that were suspended three years ago.

Meanwhile, Japan and Indonesia signed other documents Tuesday forward antiterrorism measures, tackling illegal deforestation and cooperation through the whole extent of tourism.

The sum of two units leaders ''reaffirmed the issue of terrorism is the same of the main obstacles in maintaining international peace and stability, and stated their intention to continue to cooperate in overcoming the threat'' based in succession a framework in an announcement forward fighting against terrorism, the statement said.

Koizumi and Megawati also confirmed the importance of addressing the issue of illegal logging and associated illegal trade, while pledging to elevate cooperation to promote tourism that would help enhance social, economic and cross-cultural relations of the couple countries, according to the statement.

Earlier in the day, Megawati met separately with Finance Minister Masajuro Shiokawa and Economy, Trade and Industry Minister Takeo Hiranuma to exchange views in succession the Indonesian investment environment.