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Foreign Affairs Minister Marty Natalegawa on Thursday gave a cautious response to Australia’s plan to set up a refugee processing center in East Timor, saying only that it could be part of a regional solution for the people-smuggling problem.

“Further conversations are still to be held on this issue,” Marty told the media after meeting with his Australian counterpart, Stephen Smith, in Jakarta.

He added that he and Smith would continue discussions about the plan at the sidelines of an Asean conference in Vietnam next week. East Timor will not be an Asean member until 2011, but the country is part of the Asean Regional Forum.

Australia’s new prime minister, Julia Gillard, earlier this month talked up her plan for a regional refugee center to tackle people smuggling, but later played down suggestions that she was referring to East Timor as the location.

On Wednesday, East Timorese Deputy Prime Minister Mario Viegas Carrascalao rejected the proposal, saying Dili was nobody’s “puppet.”

Marty said on Thursday that a regional framework should be set up to deal with people smuggling and the influx of refugees who were transiting through Indonesia to seek asylum in Australia, and that a processing center was “a potential component” of such a framework.

“There should be a broader picture that focuses on how to handle the issue of people smuggling,” he said, adding that the future location of the center was not yet important.

Smith said the plan was still at the “very initial phase,” and would need the full support of all countries involved.

Dozens of boats carrying asylum seekers from war-torn countries such as Sri Lanka and Afghanistan arrive in northern Australian waters every year, mostly with the help of people smugglers working out of Indonesia.

Ikrar Nusa Bhakti, a political researcher with the Indonesian Institute of Sciences (LIPI), said last week the plan might reignite conflict within East Timor, a country still dependent on foreign aid more than 10 years after its bloody vote to split from Indonesia.

“Building a refugee center in East Timor would create a social gap between the refugees and native residents,” he said.

He also accused Australia of drawing up the plan simply because “they don’t want to be disturbed by boatpeople coming into their country.”