Julia Gillard meets with Barak Obama at the APEC summit.  (PICTURE: Ray Strange)

President Barack Obama has lauded Australia as a key player in the Asian economy as he held his first talks with Prime Minister Julia Gillard and invited her to Washington next year.



Gillard meanwhile said Australia and the United States were "great mates'' and offered condolences for US losses in Afghanistan, where Australian troops are fighting shoulder-to-shoulder with American forces.

Obama also praised the "enormous sacrifices'' being made in Afghanistan by Australian troops and said he would discuss war strategy in more depth with Gillard at next week's NATO summit in Lisbon.

"The United States does not have a closer or a better ally than Australia,'' Obama said as he met Gillard in the Japanese port city of Yokohama ahead of a Pacific Rim summit.

As he wrapped up an eight-day stay in Asia designed to pry open markets and promote US job creation, Obama said the region was ``highly important to our economy and to world economic growth. Australia is a central player in that economy.''

"I am just grateful that I had this opportunity to speak to the prime minister, I have extended an invitation to her to visit the United States sometime early next year and we will find a date.''

Gillard said she and Obama had talked briefly at the G20 summit in Seoul which ended Friday and would go into depth further in Lisbon.

"Our countries are great mates, to use our term, and as great mates we have had the opportunity to work together in our region and beyond,'' she said, adding that the partners were on the same page on trade issues.

Australia is one of the closest US allies in Afghanistan, and Gillard has warned her country's forces would need to play a supporting role for years after the 2014 date when Afghan forces are set to take over security.

Australia has some 1550 troops in the country but the government is facing increasing public pressure as the war stretches on with mounting casualties.

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