Previous administrations had sought to isolate the country, but critics of that policy say it had achieved little.

Speaking in Singapore, Clinton said the US remained committed to democracy in Myanmar, but added "we are not setting or dictating any conditions.

She said existing sanctions would remain in place until the military government makes "meaningful progress" toward democracy in key areas.

Earlier this week a senior Myanmar diplomat hinted that the government may be preparing to free the country's detained opposition leader, Aung Sann Suu Kyi.

Possible release

Myanmar officials have not specified Aung Sang Suu Kyi's role in the 2010 polls [AFP]
The 64-year-old Nobel peace laureate has been held in jail or under house arrest for 14 of the past 20 years.

Speaking to the Associated Press, Min Lwin, the director-general of Myanmar's foreign ministry, said the government intended to allow Aung San Suu Kyi to play a role in next year's general elections, although he did not specify what that may be.

Last week two US envoys held talks in Myanmar with senior government officials and Aung San Suu Kyi.

Kurt Campbell, the US assistant secretary of state, and Scott Marciel, his deputy, were the most senior US officials to visit Myanmar since 1995.

Later this week Barack Obama, the US president, is due to meet leaders of the Association of Southeast Asian Nations (Asean) in Singapore, for talks that could bring him into direct contact with Myanmar's prime minister, Thein Sein.

The last US president to meet a senior leader from Myanmar was Lyndon Johnson, who held talks with prime minister Ne Win in 1966.