Opening an international security conference, Lee said one reason why many moderate Muslims are reluctant to condemn and disown religious extremists was the "wide gap that separates the US from the Muslim world".

He said the large-scale US assistance to Indonesia, the world's biggest Muslim nation, in the aftermath of the December 26 tsunami disaster had not completely erased the resentment many Muslims feel toward the United States.

"The sources of this Muslim anger are historical and complex, but they have been accentuated in recent years by Muslim perceptions of American unilateralism and hostility to the faith," Lee told the audience, which included US Defence Secretary Donald Rumsfeld.

Lee cited a survey that found that in 2000 three quarters of Indonesians said they were "attracted" to the United States but that by 2003 the number had fallen to just 15 percent.

Lee said US help to bring relief assistance to the tsunami victims in Indonesia had touched the hearts of many Indonesians.

"But this singular event has not eliminated the antipathy that many Muslims still feel towards the US," he said.

He cited demonstrations worldwide, including in Jakarta and Kuala Lumpur, following a report by the US magazine Newsweek that US interrogators at the Guantanamo Bay detention centre had flushed a copy of the Quran down the toilet.

Newsweek later withdrew the report, saying they could not confirm the story with their source.

"The US needs to make more use of its 'soft power' to win over international opinion, correct misperceptions and build trust and credibility, especially in the Muslim world," Lee said.

"In the long term this is vital if the US is to prevail over terrorism, and to maintain its position of global leadership."

Southeast Asia is considered a key front in the US 'war against terrorism' because of the presence of the Jemaah Islamiyah, a regional affiliate of Osama bin Laden's al-Qaeda network.

The Singapore meeting, called the Shangri-la Dialogue, gathers defence chiefs, top military officials, policy makers, diplomats and academics from the Asia Pacific region and their Western allies.