Asian leaders will make a renewed attempt to hammer out a solution to the bitter South China Sea dispute when they meet in Cambodia this week, using the re-signing of a broad document on conflict resolution to prod China toward agreeing to a code of conduct for the territorial flash point.

Leaders from the 10-member Association of Southeast Asian Nations will sign a commemorative version of a document called the “Declaration of Conduct,” which was first agreed in 2002 and sets out broad principles on conflict resolution.

That framework is a precursor to a potential narrower code of conduct for the South China Sea, which countries like the Philippines want implemented but China has in the past been hesitant to support. China’s leadership will meet Asean counterparts on Monday. Premier Wen Jiabao is in Cambodia, along with Commerce Minister Chen Deming.

“Hopefully out of this conference there will be a renewed fresh momentum,” Indonesia Foreign Minister Marty Natalegawa said in an interview. “We are in a holding station. Not regressing but nor are we at the same time making huge strides. Given the domestic political situation in China and other factors, being where we are is not necessarily negative.”

The South China Sea area, which is crossed by more than half the world’s total trade and is thought to contain vast energy and mineral reserves, is broadly claimed by China and in part by such nations as Malaysia, the Philippines and Vietnam. The dispute comes amid unease among some Asian countries at China’s efforts to increase its influence in the regionat a time the U.S. is seeking to do the same.

Beijing has previously opposed efforts to settle disagreements at multilateral forums, saying it prefers to handle them on a bilateral basis. A meeting of Asean foreign ministers in July broke up without issuing a communiqué for the first time in the bloc’s historyan outcome analysts blamed on host Cambodia’s weakness in the face of pressure from China.

Qin Gang, director general of the information department of China’s ministry of foreign affairs, signaled Beijing’s openness to move toward a framework for handling disputes in the South China Sea, but demurred on whether that would be via a code of conduct.

“We hope all parties can firstly observe the DOC round and then we can explore ways to further implement the DOC, by COC or other means. But it needs a serious, good discussion,” he said at a briefing.

One official involved in the talks said the commemorative declaration was viewed as a “confidence building measure” designed to ease China’s suspicions. “The priority is to ensure there is a good atmosphere” to start talking about a code,” the official said.

One idea from Indonesia: Mr. Natalegawa, who has already suggested that a telephone hotline be established in the event of any incident on the South China Sea, says countries could flag intended activities in the waters, without needing to seek permission for such activities. “Countries can inform one another ‘this is what we are doing next week or the week after,’ ” he said. Indonesia has been strengthening its leadership role in Asean and wants to use the bloc to showcase its success in creating a booming economy and stable democracy.

Its growing economic status means such practical suggestions could win the backing of other Asean members.

The talks between Asean and China come as U.S. President Barack Obama plans a historic visit to Myanmar and will also attend a wider gathering of leaders in Cambodia, the East Asia Summit. Indonesia’s foreign minister said the U.S. has struck the right tone in its handling of the tensions by staying neutral but flagging worries over ensuring access to the sea lanes, which are vital to global trade.

Asean Secretary-General Surin Pitsuwan didn’t comment on the idea of countries sharing their plans to use the waters, but said a hotline would be a pragmatic way to ensure quick communication. Thailandas country coordinator for China at Aseanwould propose the idea to China, Dr. Pitsuwan said in interview Saturday.

“I think there is a momentum of goodwill…The fact that (concerned parties) have agreed to lower the decibel between themselves, that’s already a good sign that they would work further in the direction of discussing some of these concrete issues, one by one,” Dr. Pitsuwan said.

Other territorial tensions in Asia are being discussed, most notably a long-standing territorial conflict between Japan and China in the East China Sea. The spat over a group of islands, which Japan calls the Senkaku and China calls the Diaoyu, has heated up in recent months, sparking Chinese boycotts of Japanese goods and services, which are expected to cost Japanese companies heavily.

For now, no bilateral meeting has been scheduled between China’s premier and Japanese Prime Minister Yoshihiko Noda.

“The heightening tensions (between Japan and China) are a great concern to Asean nations,” Kimihiro Ishikane, Japan’s ambassador to Asean, said in interview. “They are keeping a very close watch on how the two nations deal with the issue…because of their situation in the South China Sea.”

Asean leaders also discussed ways to deepen economic integration through harmonizing laws and stripping down trading barriers, according to an official familiar with the talks.

Asean already has an agreement to eliminate all tariffs by 2015. But governments now want to start talks on deeper economic cooperation.

Among the early steps being considered are ways to harmonize rules, regulations and customs laws and eliminate other non-tariff barriers.

“It’s a major step in thinking, because harmonizing rules for 10 countries with 10 different laws is something we know is very difficult,” the official said, describing the talks as early stage. “The fact the leaders have started to raise it means there is some political will,” the person said.

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