Sydney – Relations between Indonesia and Australia are greatly improved following last week's two-day meeting between ministers of the two countries in Canberra, Prime Minister John Howard said Sunday.

The first Indonesian ministerial group to visit Australia since relations became strained over last year's East Timor crisis took part in the meeting after cancellations earlier this year. Following the high-level talks, Australia and Indonesia are to push for a new West Pacific regional forum linking the two countries with East Timor, Papua New Guinea, New Zealand and, perhaps, the Philipines.

The forum, which they said could deal with economic, political and social issues, was proposed by Indonesia's President Abdurrahman Wahid in the aftermath of the East Timor crisis late last year, officials said at the end of the meeting.

Howard said in a televised interview Sunday that he was pleased the meeting finally happened adding: "The substance and the atmosphere of the meeting was excellent. Our relations are improving," he said. "There's still a long way to go and you have to take it in a measured way that is consistent with the political dignity of each side, but we are seeing an improvement at the government level and that's very encouraging."

Howard said he had long discussions with the five ministers, particularly with Foreign Minister and delegation leader Alwi Shihab, who has been critical of Australia. "But he indicated to me that, to use his own language, we're on the upward rather than the downward, and that's good," Howard said.

Last week' meeting was a precursor to a visit by Indonesian President Abdurrahman Wahid, who has called off numerous planned visits under pressure from anti-Australian elements in the Indonesian parliament.

Shihab said Wahid had now agreed to visit Australia in February next year, but the visit remained uncertain because of continuing anger towards Australia over its involvement in the UN-backed peacekeeping force that stemmed the violence in East Timor last September.

Howard said he had had three productive meetings with Wahid in Tokyo, New York and Brunei and hoped he would now come to Australia. "I hope the next meeting might be in Australia, but that's a matter for him – he's very welcome."