United States President Bush intensified his drive to put the war on terror at the heart of a Pacific Rim summit on Monday, despite the resentment of some Asian nations who want the forum to stick to freeing trade.

Bush, seeking practical as well as diplomatic support in his campaign against terror, appeared likely to be successful in making the issue the focus of an Asia-Pacific Economic Cooperation summit held under extraordinarily tight security.

"This is still a dangerous world," Bush said on Sunday, using the latest threats on a tape purportedly made by Osama bin Laden to bolster his case for greater cooperation by a grouping that has traditionally focused on economic issues.

His argument that terrorism poses "a direct and profound" challenge to freeing trade and increasing prosperity is already at the heart of the declaration being drafted for issue at the end of the two-day summit on Tuesday.

The final draft, a copy of which was obtained by Reuters, says the 21 members agree to "dismantle, fully and without delay, transnational terrorist groups that threaten APEC economies."

It calls for increased security coordination, tighter controls at ports and a campaign to stop militants moving money around the world.

It says the leaders promise to discuss such issues at future meetings "and to take specific actions."

Although the draft also referred strongly to promoting trade, some in Asia were clearly unhappy at the emphasis on security.

They were led by outspoken Malaysian Prime Minister Mahathir Mohamad, who told reporters: "APEC was formed as an economic cooperation group. But we don't agree (to) taking away economic matters into security, military or politics."

Some worried the divisions would cause serious friction.

"If the talks go beyond economic issues, we don't want to see the relationship among members in the forum deteriorate," said Thai Prime Minister Thaksin Shinawatra, the host of the summit and whose country has long been a close U.S. ally.

APEC includes several countries struggling to contain militancy within their own borders, including Indonesia, the world's most populous Muslim nation, Russia and the Philippines.

NORTH KOREA

Bush, who visited Japan and the Philippines on the way to the Bangkok summit, started his day at breakfast with South Korean President Roh Moo-hyun and declared "good progress" on ending North Korea's nuclear ambitions.

In a shift aimed at jumping stalled six-party talks on Pyongyang's nuclear weapons program, Bush said on Sunday he was willing to provide security assurances -- but no non-aggression treaty -- in exchange for North Korea abandoning it.

"We're making good progress on peacefully solving the issue with North Korea," Bush said as he sat down with Roh, who praised the U.S. leader's efforts "to make process in the areas related to North Korea."

Roh expressed hope the talks -- which also include Russia, China, Japan, all present at the APEC summit, and North Korea -- would resume "in the near future."

U.S. officials said the final summit communique was likely to include a reference that the Korean Peninsula be nuclear weapons free. This was short of the separate statement that had been issued at APEC last year and which Japan had wanted this year.

CHINA PANEL

Nevertheless, trade issues were still prominent at a summit of a group spanning a wide range of countries from the United States to Papua New Guinea.

Bush, facing re-election in November 2004 and under pressure from hard-pressed U.S. manufacturers who blame what they see as an unfairly undervalued Chinese currency for the loss of 2.7 million jobs in the past three years, tackled Chinese President Hu Jintao on the thorny issue.

Hu agreed to a joint panel to study the way to floating the yuan, but, significantly did so after China's central bank chief issued a long defense of Beijing's current policy of effectively pegging the yuan to the dollar.

The final draft declaration also agreed to push for a swift restart of global trade talks which collapsed in the Mexican resort of Cancun last month amid differences between developed and developing nations on how to pull down tariff barriers.

"We lent our strong support for continuing the valuable work done at the Cancun Ministerial Conference," said the final draft.

However, the language, agreed by foreign and trade ministers over the weekend, was seen largely as little more than rhetoric with APEC including countries which clashed bitterly in Cancun.

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