Indonesia has warned deploying US Marines in Australia could cause regional tensions, highlighting the balancing act nations face as Washington and Beijing jostle for influence in Asia.

China's regional neighbours welcome the United States' diplomatic campaign to assert itself as a Pacific power, and create a counterbalance to the Asian superpower's growing might, but can ill afford to alienate Beijing.

President Barack Obama announced in Canberra on Wednesday that the US would deploy up to 2,500 Marines in the northern city of Darwin, rankling China which termed it "not quite appropriate".

Indonesia, the world's most populous Muslim nation, has fast emerged as a cornerstone ally for Obama's administration but nevertheless echoed Chinese concerns about a US military build-up.

"What I would hate to see is if such developments were to provoke a reaction and counter-reaction precisely to create that vicious circle of tensions and mistrust or distrust," Foreign Minister Marty Natalegawa said at an Association of Southeast Asian Nations (ASEAN) summit on the Indonesian of Bali.

"That's why it's very important when a decision of this type is taken there is transparency of what the scenario being envisaged is and there is no misunderstanding as a result," he added.

Indonesia's frank comments came against a backdrop of a looming confrontation over a maritime dispute between the US and China who will meet at Saturday's East Asia Summit, which follows the Bali talks.

Singapore Foreign Minister K. Shanmugam said Wednesday that the ASEAN nations do not want to get "caught between the competing interests" of major powers.

And Malaysian Prime Minister Najib Razak said his country, which also has claims over the disputed South China Sea as well as strong economic ties with Beijing, did not back any development that would undermine regional security.

"Our position is we do not want any development that would undermine this region as a region of peace and stability nor anything that would increase tension in the region," Najib told reporters at ASEAN.

"What is important is the role of the US in the region vis-a-vis China, and that has to be managed constructively."

However the Philippines, another South China Sea claimant which has angered Beijing with a push for a joint stand on the strategic issue at the ASEAN summit, welcomed a more robust US presence in the region.

"If you are asking me in general how I view the increased engagement of the US in Australia and in the region, we view the presence here... as ultimately a stabilising force, and we welcome that," said Ramon Carandang, spokesman for President Benigno Aquino.

Earlier this month in Jakarta, Natalegawa had been more welcoming of Washington's new commitment to the region.

There has been "real increased attention, and enhanced attention on the part of the United States to the Asia Pacific region. You can see a very clear upward trend," he said then.

"We would expect the United States to continue to play its stabilising role in promoting peace and stability and prosperity in the region."

Last year Obama, who spent part of his childhood in Indonesia, sealed a "comprehensive partnership" with the country designed to boost ties across a range of fields, including military, trade and climate change.

Indonesia was a cold war ally of Washington, and relations that had cooled during the long Suharto dictatorship have been improving after his 1998 fall and the country's turn to democracy.

Jason Clare, Australian minister for defence materiel, said Australia had told its neighbours about the US deployment on Indonesia's southern doorstep in recent days, and that it would be discussed at Saturday's summit.

"That's good for trust, good for transparency," he said.