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MELBOURNE, Nov 15 AAP

November 15 2012, 10:32AM

Australia's relationship with Indonesia could not be pressed harder, despite former prime minister Paul Keating's appeal for closer ties, Foreign Minister Bob Carr says.

Mr Keating said it was imperative for Australia to enhance its relationship with Indonesia and show we can set our own path without kowtowing to the United States, in a speech about Australia and Asia in Melbourne on Wednesday night.

But Senator Carr said the federal government was "working on all fronts" with Indonesia.

"The Indonesia relationship could not be pressed harder by Australia," Senator Carr told ABC radio in Melbourne on Thursday.

Senator Carr said Australia's largest embassy was in Jakarta, Indonesia was the biggest recipient of Australian aid, Australia was building 2000 schools across the country and there was important counter-terrorism co-operation.

But he said while there was a close relationship, Indonesia had no interest in developing a security alliance with Australia.

"Indonesia's a very strong member of the non-aligned movement and the currents of the non-aligned movement flow through its foreign policy," he said.

Senator Carr said Mr Keating overlooked the differences between the Bush and Obama administrations in the US.

"I think the striking thing here is that the America that we're dealing with now is different from the America of the Bush administration," he said.

"The unilateralism, the foreign policy adventurism that many Australians found objectionable in the stance, the posture of George Bush, is not reflected in the multilateralism, the consultation, the engagement, the involvement with our region, the involvement with Asia, that is distinctive of the Obama administration.

"That makes it relatively comfortable for us as Australians to work with Hillary Clinton and her objectives."