Indonesia appears lukewarm on Australia's plan to build a regional asylum-seeker processing centre in East Timor.

Foreign Minister Stephen Smith briefed his Indonesian counterpart Marty Natalegawa on the Gillard government's proposal during talks in Jakarta today.

Asked later if Indonesia supported the plan, Dr Natalegawa was non-committal. "Further conversations are still to be had on this issue," he told reporters.

Dr Natalegawa said he agreed there was a need for a better regional framework to deal with people smuggling and asylum seekers, of which a processing centre was a "potential component". "I can understand the rationale," he said, but would not be drawn on the specifics of location.

Mr Smith said their discussions on the topic were "productive". "This is something we will progress in the weeks ahead," he said.

The pair would meet again on the sidelines of next week's ASEAN meeting in Vietnam to discuss the matter further, he said.

The government says East Timor remains its first choice for a processing centre even though the country's parliament this week rejected the proposal.

Mr Smith was also expected to meet with Indonesian Trade Minister Mari Pangestu during his 24 hours in Indonesia. He was also scheduled to open the Australia-Indonesia Facility for Disaster Reduction.

Earlier, Mr Smith attended the opening of the 2000th school built under the Australia-Indonesia Basic Education Program, where he received a warm welcome from students.