(Adds Australia foreign minister says talks focused on India)

By Chisa Fujioka

SYDNEY, Sept 8 (Reuters) - Leaders of the United States, Japan and Australia agreed on Saturday to deal "constructively" with China, which has cast a wary eye on the trilateral summit, fearing it could turn into an alliance aimed at containing it.

U.S. President George W. Bush, Japanese Prime Minister Shinzo Abe and Australian Prime Minister John Howard had been expected to urge China to be more transparent about its military build-up.

"There was a common understanding on the importance of dealing constructively with China," said a senior Japanese government official after the talks.

Before the meeting on the sidelines of an Asia-Pacific summit in Sydney, China aired suspicions of encirclement if the talks were widened to include India, as Japan has suggested.

On a visit to India last month, Abe called for a "broader Asia" partnership of democracies that would include India, the United States and Australia, but omit China, Asia's second-biggest economy.

Australian Foreign Minister Alexander Downer said the trilateral talks focused on "India and the importance of that country to us in the Asia-Pacific region and to the broader geopolitics of the Asia-Pacific region".

"I think there is a recognition now that India is a coming great power," Australian Foreign Minister Alexander Downer told reporters after the trilateral summit.

"It is of course the world's largest democracy, its economy is growing at a rapid rate...and it is a country that we are all feeling increasingly comfortable in working with," he said.

Downer said India, unlike Australia and Japan did not have an alliance relationship with the United States, and it was unlikely to become a fourth partner in the security dialogue.

"I mean nothing like that is going to happen anytime soon, but we're looking in a more general sense at progressing the relationship with India, not collectively, each individually doing it," he said.

PARTNERSHIP OF DEMOCRACIES

Ships from Australia, Japan and Singapore took part in wargames led by the United States and India this week in the Bay of Bengal, seen by some analysts as a new alliance of democracies ranged against the growing military might of China.

The three nations have tightened ties in recent months, with Australia and Japan agreeing to a defence pact in March, while Australia clinched an agreement with the United States this week giving it access to top-secret military technology.

They have been keen to deflect concerns by China, a major trading partner, that they are trying to contain its growing clout, although Japan has proposed having regular talks grouping countries sharing common values.

Abe, keen to maintain Tokyo's close ties with Washington, said in a meeting with Bush that he would work to continue supporting U.S.-led military operations in Afghanistan, despite a powerful Japanese opposition leader's refusal to back an extension of the mission.

The two "agreed on the importance of the Japanese-American refueling operation in the Indian Ocean", Abe told reporters.

A law allowing the mission expires on Nov. 1, but opposition parties controlling parliament's upper house could delay legislation and suspend the mission -- a move policy experts see souring Japan's security ties with the United States.

Accompanied by their foreign ministers, the three leaders also agreed it was vital for North Korea to scrap its nuclear weapons programmes, the Japanese official said.

Regional security fears have mounted since North Korea conducted a barrage of missile tests and its first nuclear test last year, prompting intense multinational negotiations aimed at persuading Pyongyang to abandon its nuclear weapons.

Australia is not part of the six-way talks -- grouping the two Koreas, the United States, China, Japan and Russia -- but is one of the few Western nations to have diplomatic ties with Pyongyang and sent envoys to the reclusive state in March. (Additional reporting by Michael Perry in Sydney)

AlertNet news is provided by