Lee Siew Hua, Washington – The United States said turmoil in Indonesia will threaten its immediate neighbours and hollow out Asean, while endangering US strategic goals.

While President Abdurrahman Wahid fights impeachment, "instability in the world's fourth most populous nation would threaten not only Indonesia's immediate neighbours, but also our strategic and regional objectives", Deputy Assistant Secretary of State Ralph "Skip" Boyce told Congress.

"Growing social disarray in Indonesia could offer a regional entree to Islamic radicalism and possibly international terrorism," he said. The US goal is "a united, democratic, stable, and prosperous Indonesia", and the Bush administration hopes Jakarta will move in this alternative direction.

But he conceded that outside actors like the US have limited influence. "The size and complexity of that nation as well as the limits on our resources dictate that we focus on top priorities, maintaining a long-term strategic approach," he said.

Speaking before the Asia-Pacific panel of the House International Relations Committee, Mr Boyce, who will be the new US ambassador to Jakarta, said the US is not taking sides in the unfolding drama. "We firmly believe the current leadership crisis is a purely domestic matter for Indonesians to resolve."

His views found support with Congressman James Leach, chairman of the Asia-Pacific panel, who said: "It is strongly in the interest of America and the world for Indonesia to succeed." Mr Boyce added that the Bush administration sees the Indonesian military as a "central, truly national institution with enormous potential to support or subvert Indonesia's democratisation".

Mr Boyce, who has been briefing groups of lawmakers on Indonesian policy and also on the sensitive issue of reviving contact with the Indonesian military, said: "We will also carefully modulate our broader contacts with the Indonesian military as a part of any coordinated effort to strengthen Indonesia's institutions." Working with the military also matches wider US goals, he said. "We can and should work constructively with the military to meet specific US interests – regional stability, anti-piracy and policing the archipelago's economic zone waters come to mind."

He said the US was mindful of many positive developments. "Democracy has begun to take deep root. Civil society is flourishing, with multiplying non-government organisations contributing to public discourse. "Most notably, Indonesia now boasts an independent and vigorous parliament." He emphasised the long-term view, even if the short term often provides "disappointments".