(Updates with draft APEC climate statement reached)

By Michael Perry

SYDNEY, Sept 7 (Reuters) - President George W. Bush prepared for an Asia-Pacific summit in Australia, saying on Friday the United States would consider a peace treaty with North Korea if it gave up nuclear arms.

Washington has been accused of ignoring Asia as it focuses on Iraq, but on the eve of this weekend's Asia Pacific Economic Cooperation summit, Bush weighed into major regional issues.

"We must press the regime in Burma (Myanmar) to stop arresting, harassing, and assaulting pro-democracy activists for organising or participating in peaceful demonstrations," Bush said in a speech to Asia-Pacific business executives in Sydney.

The comments come a day after hundreds of Buddhist monks held a group of government officials for several hours and torched their cars in anger against the military that rules impoverished Myanmar, formerly called Burma.

Bush also said China should allow more freedoms ahead of the 2008 Olympic Games and later after meeting South Korean President Roh Moo-hyun offered the possibility of a treaty with Pyongyang.

"We're looking forward to the day when we can end the Korean War. That will happen when Kim Jong-il verifiably dismantles his weapons programme," said Bush.

Bush said he was referring to a formal peace treaty. Fighting in the 1950-53 Korean War ended with an inconclusive truce.

Bush's comments follow several weeks of apparent progress in ending a crisis over the weapons programme of a country he had once bracketed with pre-war Iraq and Iran in an "axis of evil".

A Foreign Ministry spokesman for China, which fought along side the North in the Korean War and was a party to the original ceasefire, said Roh had raised the issue in a meeting with Chinese President Hu Jintao earlier in the day and Beijing had a "positive attitude" toward the prospect of a truce.

Next week, nuclear experts from the United States, China and Russia will visit North Korea to conduct a survey of nuclear facilities to be disabled, U.S. envoy Chris Hill said on Friday.

The inspections "would mark another important step toward denuclearization of the Korean peninsula", said Hill in Sydney.

RUSSIA LOOKS EAST

Myanmar's crackdown on protests against huge fuel price rises also drew expressions of dismay from other Asia-Pacific nations.

China, Myanmar's closest ally which is usually reticent when it comes to the affairs of others, also sounded frustrated with its southeast Asian neighbour.

"We hope to see reconciliation and improvement in the situation in Burma," said a foreign ministry spokesman.

But while Bush was reinforcing his Asian credentials, Russian President Vladimir Putin was seeking to forge new links.

"Closer ties with APEC naturally complements our own plans of economic development of Siberia and the Far East," Putin said.

Putin signed a major deal on Friday to buy Australian uranium to fuel civilian nuclear plants -- a day after snaring a $1 billion arms sale deal with Indonesia.

Australia holds 40 percent of the world's reserves, but only agreed to sell uranium to Moscow after guarantees it would not be resold to Iran or Syria. Russia has close ties with both states.

Putin is vying with the United States and China for a leading role in the region and wants Russia to host 2012 APEC summit.

Bush on Friday offered to host a meeting of Southeast Asian leaders at his Texas ranch, as he sought to counter perceptions that he was not paying enough attention to the region.

TRADE, CLIMATE

On the issue of trade, Bush said he was ready to show flexibility to jump-start the moribund Doha round of world trade talks, which he called a "once-in-a-generation" opportunity.

But he said intransigence by just a handful of countries could bring negotiations to a standstill.

Host Australia has placed climate change at the top of the APEC leaders' agenda. Green groups have said the summit would be a failure if it did not agree to binding greenhouse gas reduction targets, but Australia has said no binding targets will be set.

Asia-Pacific officials agreed on Friday to a draft climate statement which reaffirms a U.N. treaty on fighting global warming while urging non-binding "aspirational targets" for greenhouse gas reductions, said an Asian delegate.

But the statement, which has emerged after tough negotiations following a split between APEC developing and developed members, remains to be agreed at the summit starting Saturday. (Additional reporting by John Ruwitch, Caren Bohan, Matt Spetalnick and Jalil Hamid)

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