JAKARTA, Aug 6, Reuter - Chinese Premier Li Peng brushed aside nearly a quarter of a century of hostility with Indonesia on Monday and said better relations between the two Asian nations would bring stability to the region.

Arriving in Jakarta to resume diplomatic ties after a break of 23 years, Li said in a statement the restoration "will contribute to peace, stability and development of the Asian region".

Jakarta turned its back on Beijing in 1967, accusing China of supporting a communist coup attempt two years earlier.

The rift was a turning point for southeast Asia, which had feared incumbent president Sukarno's anti-western leadership would give China an opportunity to gain a foothold in the region.

Li ignored the years of frosty relations. "Since time immemorial our two peoples have enjoyed friendly contacts with each other," his statement said.

The question of Cambodia was likely to be high on the agenda of Li's talks with President Suharto, Foreign Minister Ali Alatas told reporters.

Jakarta, a major sponsor of efforts to end Cambodia's war peacefully, hopes to use Li's visit to push Beijing to drop support for the radical Khmer Rouge, the most powerful faction in the guerrilla coalition fighting the Phnom Penh government, foreign ministry sources said.

The highlight of Li's five-day visit would be the formal resumption of relations scheduled for August 8, when a trade agreement will also be signed.

Beijing, shunned by most western nations since it brutally crushed pro-democracy protests in June last year, was delighted to improve ties with the world's fifth most populous nation, political analysts said.

Suharto, too, scores political points by renewing ties when China's international standing is at a low ebb, they said.

"It turns him into the grand benefactor of Asian politics," one specialist in international relations said.