(Corrects U.S. secretary of state's name in paragraph 20 to ...Condoleezza Rice ..., not Condaleeza)

By Rob Taylor

SYDNEY, Sept 5 (Reuters) - Australian Prime Minister John Howard vowed to keep Australian troops in Iraq despite mounting pressure at home to withdraw, as annual Asia-Pacific meetings began in Sydney.

"Our commitment to Iraq remains. This is not the time for any proposals of a scaling down of Australian forces," Howard told a joint news conference with U.S. President George W. Bush, pointing to next week's crucial progress report to the U.S. Congress on the American troop surge in Iraq.

"It's historic work, Mr Prime Minister, and it's important work, and I appreciate the contribution that the Australians have made," Bush replied to the veteran Australian leader, whose support for the war in Iraq is clouding his re-election hopes.

The two men then clambered aboard a luxury yacht, and accompanied by a dozen zodiac boats packed with heavily armed, black-clad security personnel, sped across Sydney harbour to join several hundred Australian troops and sailors for lunch at the Garden Island naval base.

"I"m looking forward to you buying me lunch today. I'm a meat guy," Bush joked to Howard, who has been prime minister since 1996.

It was genuine camaraderie between two old friends whose popularity has suffered over the four-year war in Iraq.

Australia has about 1,500 troops in and around Iraq, while the United States has 160,000 soldiers there.

Bush rewarded Howard for his loyalty by signing a treaty with him on Wednesday giving Canberra improved access to top-secret U.S. military technology and intelligence.

Australia had long complained of U.S. restrictions on weapons technology and information because of Washington's concerns about espionage.

BIGGEST SECURITY OPERATION

Bush arrived early for the Asia Pacific Economic Cooperation summit this weekend in order to prepare for next week's report to Congress on the Iraq war.

Australia has launched the country's biggest ever security operation, including erecting a 2.8 metre (9 feet) security fence that has virtually cut Sydney centre in two, and which has put residents in a grumpy mood.

Australia has never experienced a terrorist attack within its borders.

Anti-war activists plan mass weekend protests, expected to draw up to 20,000 people onto the streets against Bush's visit and the Iraq war.

"I have absolutely no doubt that minority groups will engage in a level of violence not previously experienced in Sydney," police chief superintendent Steve Cullen said.

But at an anti-Bush rally at Sydney Railway Station on Tuesday ahead of the President's arrival, media outnumbered the noisy but peaceful protesters.

Trade liberalisation and climate change top the agenda at the APEC meetings, and Bush wants the group's 21 economies to agree to a strongly worded pledge to reinvigorate the Doha round of world trade talks.

Bush and Howard also talked about the rise of China, whose President Hu Jintao is also in Australia and was expected in Sydney for APEC later on Wednesday. Hu visited a farm near the Australian capital, Canberra, to watch sheep being shorn. China is Australia's biggest wool export destination and resource market, and -- in contrast to Bush -- Hu has received a warm public reception in Australia.

Ice sculptures of Bush's and Howard's face were placed by protesters near Sydney's famous Harbour Bridge to slowly melt in the sun, symbolising the refusal of the United States and Australia to sign the Kyoto climate pact.

About 40 trade and foreign ministers, including U.S. Secretary of State Condoleezza Rice, gathered at Sydney's main convention centre on Darling Harbour to hammer out a declaration for their leaders to consider at a weekend summit.

A draft of that declaration, obtained by Reuters, says the 21 APEC members will try to develop a more robust approach to strengthening food and product safety standards in the region.

APEC has begun work on a recovery programme to revive trade in the event of a terrorist attack and a set of principles "to help protect the food supply against deliberate contamination", the draft declaration said.

On trade, APEC will focus this year on "behind the border issues", competition policy, strengthening capital markets, combating corruption, promoting good governance, and a more certain legal and regulatory climate.

The draft declaration, however, gives short shrift to a U.S.-backed Free Trade Area of the Asia-Pacific.

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