BANGKOK: A US policy change seeking to engage Myanmar's junta as well as target it with sanctions highlights the West's ongoing dilemma as it tries to promote democracy in the military-ruled nation.

After 13 years of western sanctions that have had little visible effect, US Secretary of State Hillary Clinton on Wednesday raised the possibility of an eventual easing -- or lifting -- of some measures if political engagement works.

The generals who have ruled Myanmar since 1962 have proved unresponsive to sanctions. This year they extended the house arrest of pro-democracy icon Aung San Suu Kyi, effectively ruling her out of elections due in 2010.

The respected International Crisis Group (ICG) think-tank said in a recent report that continued isolation for the country formerly known as Burma neither helped its people nor brought the West any closer to its goals.

"Western policies of economic sanctions and isolation have failed to produce change in Myanmar," the Brussels-based group said. "Twenty years of aid restrictions have weakened, not strengthened, the forces for change."

The European Union adopted sanctions against the regime in 1996. They ban arms sales to the junta, deny entry to top junta officials and their cronies and prevent EU investments in Myanmar state enterprises.

There is also an embargo on imports of wood, metals, and mineral products and precious and semi-precious stones.

Washington followed suit in 1997, banning American investments, outlawing imports from Myanmar, freezing the assets of top Myanmar officials -- including junta chief Than Shwe -- and banning them from travelling to the United States.

But these measures have been undercut by the fact that Myanmar's massive neighbours China and India are not only willing to do business with the junta but to prop them up.

The Association of Southeast Asian Nations (ASEAN) has meanwhile come under fire from the west for adhering to its rule of non-interference in members' affairs, with the bloc opting instead for engagement with the junta.

But the movement against sanctions has grown in the United States, led by US Senator Jim Webb, who last month flew to Yangon to secure the release of an American man jailed for swimming to Suu Kyi's house.

Webb said after meeting Suu Kyi in Yangon that after years of backing sanctions she was now "not opposed" to lifting certain measures. He is to hold an October 1 senate hearing on their effectiveness in fostering reforms.

Suu Kyi on Thursday welcomed the US moves to talk to the regime but said that her party was still formulating its current position on sanctions, her lawyer Nyan Win said.

"Daw Aung San Suu Kyi said that direct engagement is good," Nyan Win told AFP, adding that it was necessary for the US to also stay engaged with the opposition.

Trevor Wilson, a former Australian ambassador to Rangoon, said that sanctions were still necessary but the regime needed to be told exactly what to do to have them lifted.

"A policy that retains some sanctions as a form of pressure or leverage against the regime is probably a good idea," Wilson told AFP.

"But the problem with US sanctions is that they are not connected clearly with some steps that need to be taken for these sanctions to be lifted. It's a very crude policy," he added.

"You have a much better chance if you communicate about that and try to persuade and encourage the regime to make changes if you talk with them directly, rather than just do it through media and repressive sanctions."