Demonstrators, one of them wearing a Bush look-alike mask, chant slogans as they burn a North Korean national flag, while a riot police officer sprays fire extinguisher during a protest against North Korean nuclear ambitions in Busan, South Korea. (AP Photo/Ahn Young-joon)

BUSAN, South Korea (AP) - Asia-Pacific leaders opened their annual summit Friday where they were expected launch a bid to revive stalled global free trade talks and pledge unity in combating bird flu and terrorism.

Outside the venue, demonstrators clashed with riot police using high-powered water hoses. Some 4,000 demonstrators marched on the summit venue in the port city of Busan where leaders from the 21-member Asia Pacific Economic Co-operation forum, including Prime Minister Paul Martin, U.S. President George W. Bush, Chinese President Hu Jintao and Russian President Vladimir Putin were gathered.

When they reached a blockade of shipping containers police had placed in a road near the convention centre, the protesters began banging on the containers and demanding to pass. Police ordered them to stop, and when they didn't the police turned water hoses against the crowd to try to disperse them.

Protesters threw rocks and other debris at black-clad security forces armed with riot shields and batons. The clashes occurred about 500 metres from the meeting venue, but on the other side of a river.

As they marched on the venue, the protesters chanted slogans and carried signs reading Get rid of APEC and Let's get Bush.

They were led by thousands of farmers, who have been angrily outspoken in South Korea over plans to liberalize the country's rice market.

Tens of thousands of police and military forces have been deployed in the city against terrorist attacks and to keep protesters away from summit venues. Protests remained peaceful Friday afternoon.

The leaders are set to endorse a statement agreed upon earlier by APEC ministers that aims to foster progress in World Trade Organization talks set for next month in Hong Kong. That statement acknowledged "considerable divergences" and said "a clear roadmap" must be established if the current so-called Doha round of WTO talks is to succeed.

Earlier Friday, the presidents of Chile and Mexico defended bilateral and regional free trade agreements as good for their economies, but emphasized that the ultimate goal remains a strong multilateral trading system based on the WTO.

China and Chile signed a free-trade agreement on APEC's sidelines - the first between the Asian giant and a Latin American country.

"It is essential that the leaders be able to put all of our political will and to instruct the negotiators that it is necessary to succeed," Chilean President Ricardo Lagos told a chief executives' gathering alongside the APEC summit.

Mexican President Vicente Fox told the executives that APEC must "come up with a very solid, strong voice" ahead of the WTO's Hong Kong meeting.

But there was also pessimism about what can be accomplished.

"It's not being melodramatic to say that unless there is a very significant shift in the attitude of some countries, we are not going to have a successful Doha trade round," Australian Prime Minister John Howard said.

Howard named the European Union and Japan as holdouts on lowing agricultural subsidies.

In their own statement to be endorsed as the Busan Declaration, the leaders will give their support to free trade and also express strong concern about the threats of terrorism and bird flu, according to a draft of the document seen by The Associated Press.

"Terrorism remains as a menacing threat to our world and we condemned terrorist acts that not only took thousands of lives but have also been aiming to destabilize the security of the region," the draft states.

Concerns over the possibility of a human pandemic spawned by bird flu have grown in recent days with China admitting its first human cases of the disease. Bush is expected to make bird flu a major focus, and APEC leaders are set to agree on initiatives committing to boost their preparedness against a possible outbreak.

Howard urged countries to put aside "national pride or self-consciousness" and be open about reporting outbreaks.

"The last thing that any nation can afford, not only in its own interests but in the interests of fellow members of the world community, is to in any way hide or cover up the onset of the signs of an outbreak of something that could turn into a pandemic," Howard said at the executives' forum.

The meeting's host, South Korean President Roh Moo-hyun, shook hands with each arriving leader at the conference centre before they headed into a closed meeting. Roh will host an official dinner later Friday.

On the sidelines of APEC, leaders are also holding separate meetings.

Bush met with Southeast Asia leaders to underscore U.S. interest in the region - one of the battlegrounds in the fight against terrorists - and to urge they exert their influence on Myanmar's military junta. He also met with Russia's Putin.

Amid a diplomatic row over allegations Japan is glorifying its colonial past, Roh will briefly meet Friday with Japanese Prime Minister Junichiro Koizumi, who has reignited anger in South Korea and China by again visiting a shrine honouring convicted war criminals among other war dead.

The summit ends Saturday.