Australia and Indonesia have agreed to start work on a new security treaty. Talks in Canberra between Prime Minister John Howard and President Susilo Bambang Yudhoyono have focused on counter-terrorism efforts, economic development, and the reconstruction of Indonesia's tsunami-ravaged Aceh province.

A new agreement between Australia and Indonesia aims to enhance security, economic, and social ties. It also focuses on efforts to rebuild Indonesia's Aceh Province, devastated by December's tsunami.

Indonesian President Susilo Bambang Yudhoyono has described this wide-ranging deal as the "most significant landmark" in relations between Canberra and Jakarta, which have, in the past, not always been good.

For example, a defense treaty signed a decade ago collapsed over Australian troops that were sent to keep the peace in East Timor, after it voted to secede from Indonesia in 1999.

President Yudhoyono believes those old suspicions have been replaced by an enthusiasm for improved cooperation.

"I strongly hope that my visit here will affirm the importance of Australia to Indonesia and will help usher in a new era of bilateral relations between Australia and Indonesia and all the great promise that comes with it," he said.

This is only the third time an Indonesian president has visited Australia in the past 30 years.

Australian Prime Minister John Howard said tragedy had brought the two countries closer together in recent times.

His government has committed $770 million to help victims of the Indian Ocean tsunami.

Earlier this year, Mr. Howard said it was the biggest aid contribution Australia had ever made and would place relations with Indonesia "on an even firmer footing."

In Canberra, Mr. Howard said he hoped close ties between Australia and Indonesia would continue to develop.

"We are forever together in this part of the world and we are therefore committed to ensuring that this grows from strength to strength," said Mr. Howard.

The two leaders embraced Sunday at the start of President Yudhoyono's visit as both mourned victims of last week's earthquake in Indonesia and the deaths of nine Australian military personnel, killed when their helicopter crashed during a relief mission in the devastated region.