BALI, Indonesia -- Ten Southeast Asian nations signed an ambitious accord Tuesday establishing a Europe-like economic community by 2020 in a region where democracies neighbor dictatorships and First World economies abut financial basket cases.

But the Association of Southeast Asian Nations emphasized that the agreement, part of a blueprint dubbed Bali Concord II, was limited to economic relations. It would not create a political union like Western Europe's or a military alliance akin to NATO, although it calls for a regional security community to combat terrorism and other transnational crimes.

"We have just witnessed a watershed in the history of ASEAN," Indonesian President Megawati Sukarnoputri said. "That will make it possible for our children and their children to live in a state of enduring peace, stability and shared prosperity."

The Southeast Asian leaders chose Bali as a symbolic venue for their two-day summit that opened Tuesday. Terrorists blew up two nightclubs on this island a year ago, killing 202 people.

Troops in combat gear patrolled outside the summit venue, and military men in shorts rode jet skis before beachfront hotels catering to Asian and European tourists.

ASEAN, which has been criticized for doing little, on Tuesday made some of its most far-reaching commitments -- ones that some believe will be nearly impossible to carry out.

ASEAN includes the fledgling democracies of Thailand, the Philippines, Indonesia and Cambodia; the limited democracies of Malaysia and Singapore; the communist regimes of Laos and Vietnam; an absolute monarchy in Brunei; and a military dictatorship in Myanmar.

Despite those differences, Southeast Asian countries want to band together to counter the burgeoning economic might of India and China, which are siphoning off investment and trade considered essential for Southeast Asia's development.

Positive developments

Underscoring ASEAN's desire to avoid politics, its leaders shied away from criticizing Myanmar's military rulers for their continued detention of pro-democracy leader and Nobel Peace Prize laureate Aung San Suu Kyi.

Malaysian Prime Minister Mahathir Mohamad, Asia's longest serving elected leader, urged ASEAN to maintain its policy of "noninterference in the internal affairs of member countries."

In ASEAN's closing statement, Indonesia's president did not mention Suu Kyi but said Myanmar's recent pledges to work toward democracy were a "positive development."

Suu Kyi was seized May 30 following a clash between her supporters and a pro-junta group, and then detained. She later underwent surgery and was confined to her house in the capital, Yangon.

During weekend talks leading up to the summit, Myanmar maintained Suu Kyi no longer was detained, Indonesian officials said.

However, Japan said she had not yet been freed, prompting its prime minister, Junichiro Koizumi, to confront Myanmar Premier Khin Nyunt at the summit and demand Suu Kyi's "immediate" release, a Japanese government spokesman said.

Koizumi, whose nation is not a member of the group, was at the summit to meet with ASEAN leaders.

The accord signed Tuesday sets deadlines for lowering tariffs and travel restrictions in the ASEAN region, which encompasses 500 million people and trade totaling $720 billion a year. It aims to create by 2020 the ASEAN Economic Community, modeled on European economic integration of the 1960s and 1970s -- before the advent of the European Union.

The summit's ASEAN-only portion ended Tuesday, but the group was meeting with leaders from China, Japan, South Korea and India before adjourning Wednesday.

ASEAN wants to create a free trade agreement with China forming a market of 1.7 billion consumers with a combined GDP of $2 trillion.