HUA HIN: Asian nations discussed plans at a major summit Saturday to "lead the world" by boosting economic and political cooperation and possibly forming an EU-style community. The prime ministers of regional giants China and India also looked to foster unity on the sidelines of the summit in Thailand after months of trading barbs over long-standing territorial issues.

But nuclear-armed North Korea and military-ruled Myanmar were also set to top the agenda in the royal beach resort of Hua Hin, underscoring the challenges still facing the region.

The summit groups the 10-member Association of Southeast Asian Nations (ASEAN) with regional partners China, Japan, South Korea, India, Australia and New Zealand.

Japan's new Prime Minister Yukio Hatoyama said a proposed East Asian community involving all 16 countries should aspire to take a leading role as the region makes an early rebound from the global economic crisis.

"It would be meaningful for us to have the aspiration that East Asia is going to lead the world and with the various countries with different regimes cooperating with each other towards that perspective," Hatoyama, who took office last month, told the Bangkok Post newspaper.

He described Japan's alliance with the United States as the cornerstone of its foreign policy, but said the region should "try to reduce as much as possible the gaps, the disparities that exist amongst the Asian countries".

China would "doubtless" grow further, particularly economically, "but I do not necessarily regard that as a threat," Hatoyama said.

Officials said separately that East Asian nations would carry out a feasibility study for a huge free trade zone covering ASEAN, China, Japan and South Korea and a larger group involving India, Australia and New Zealand.

Increased integration has been a recurring theme of the meetings in Thailand, as the rapidly changing region seeks to capitalise on the fact that it has recovered more quickly from the recession than the West.

ASEAN leaders have been discussing plans to create their own political and economic community by 2015.

But cross-border spats have continued to dog the summit, with host nation Thailand dragged into a war of words with Cambodia and India and China seeking to resolve their differences.

Chinese Premier Wen Jiabao and his Indian counterpart Manmohan Singh held "productive" talks on the sidelines of the summit Saturday but did not discuss their spat over territorial issues, officials said.

"We have reached important consensus on promoting bilateral ties," Wen was quoted as saying by the Chinese state news agency Xinhua as the talks opened.

Beijing has voiced its opposition to a recent visit by Singh to Arunachal Pradesh, an Indian border state at the core of the dispute, and to a planned visit there next month by the Dalai Lama, the exiled Tibetan spiritual leader.

Arunachal Pradesh and the Dalai Lama were not discussed at Saturday's meeting, an Indian delegation official said. The two nations fought a border war in 1962.

Human rights issues have also marred the summit. A widely criticised rights body officially launched by ASEAN on Friday was due to have its first ever meeting on Saturday.

The bloc was caught up in a row on Friday when leaders barred several activists from meeting them as previously arranged.

Meanwhile Thailand and Cambodia remained at loggerheads over the fate of fugitive former Thai premier Thaksin Shinawatra, after Cambodian Prime Minister Hun Sen bizarrely offered him a job as his economic adviser.

Around 18,000 troops and dozens of armoured vehicles have been deployed in Hua Hin after it was twice postponed by anti-government protests, with another 18,000 on standby or on duty in Bangkok.

The leaders are expected to sign a host of agreements this weekend on economic and other issues including climate change, disaster management, communications and food security in the rapidly changing region.