JAKARTA - US Secretary of State Hillary Rodham Clinton Thursday held talks with Indonesian President Susilo Bambang Yudhoyono on the second day of her trip to the world’s most populous Muslim nation.

Clinton’s visit to Indonesia was seen by many observers as an attempt to forge better ties with the Islamic world in line with US President Barack Obama’s new approach to foreign policy.

Neither Clinton nor Yudhoyono commented on their talks to the media, but the president’s spokesman said Yudhoyono stressed the need for closer economic cooperation in a time of crisis.

‘The president wishes that in a difficult economic situation, both in the US and Indonesia, economic cooperation must not weaken but should instead be strengthened,’ Dino Patti Djalal said.

Clinton later visited a sanitation project funded by the US Agency for International Development in central Jakarta, where she chatted briefly with locals, before flying to South Korea.

Clinton said Wednesday that Indonesia had demonstrated that Islam, democracy and modernity not only could co-exist ‘but also thrive together’ and Jakarta could play a critical role in US efforts to reach out to the world.

The US is Indonesia’s second-biggest export destination, but Jakarta has been critical of some US policies under Obama’s predecessor George W. Bush, especially Bush’s decisions to invade Iraq and Afghanistan.

After talks with Clinton Wednesday, Indonesian Foreign Minister Hassan Wirajuda said Washington and Jakarta had agreed to forge a ‘comprehensive partnership’ covering areas such as trade, investment, health, science and security.

Clinton’s stop in Indonesia could be the prelude to a visit by Obama, who as a child went to school in Jakarta after his mother married an Indonesian following the end of her marriage to Obama’s Kenyan father.

Many Indonesians are proud of Obama’s Indonesian connection and hope that it would serve as an impetus for closer ties between the two nations.

Clinton said in remarks during a dinner Wednesday that amid pressures of leading a nation hit by a financial crisis, Obama could take solace in the fact that many in Indonesia loved him.

‘The president has to cope with all kinds of pressures and hardships and challenges,’ she said.

‘So for a president, knowing he can go somewhere in the world where he is so loved as he is loved in Indonesia, he may just want to wait until he really needs that visit,’ Clinton said.

Clinton appeared on a youth television show Thursday and confirmed that she would attend a conference March 2 in Egypt on rebuilding the Gaza Strip.

Dino said Indonesia would also send a delegation to Cairo, led by Welfare Minister Aburizal Bakrie.

Jakarta was Clinton’s second stop after Japan on her first overseas trip since becoming the top US diplomat last month. She is to also travel to South Korea and China before departing for Washington Sunday.

Clinton also visited the secretariat of the Association of South-East Asian Nations (ASEAN) in Jakarta and met the 10-nation group’s secretary general, Surin Pitsuwan, Wednesday in a sign that the US is paying closer attention to the region.

She said the US would launch the process to accede to the ASEAN-driven Treaty of Amity and Cooperation, designed to promote regional peace and stability.

‘We welcome the US’ renewed interest and re-engagement in the region as symbolised by her visit here,’ Surin said.

He said the Obama administration’s plan to start the process for accession to the treaty was ‘a reaffirmation of the US’s political and security commitment to the region’.