Ms Suu Kyi, who has been under house arrest for 12 of the past 18 years, was driven from her home on Yangon's University Avenue to a government guest house, where she met four NLD members for about an hour, reports from Yangon quoting witnesses and diplomats said.

She also met General Aung Kyi, the minister designated by the junta to liaise with her, and came away 'optimistic' and believing that it was time to 'work for the healing process', her party said.

'Daw Aung San Suu Kyi said she believed the ruling authorities have the will for national reconciliation,' NLD spokesman Nyan Win said in a statement after the meetings.

Asked to compare a previous meeting in 2004 with yesterday's, he said: 'This time the discussion is more optimistic and more workable.'

The NLD spokesman said that he could not release details of the discussion, but Ms Suu Kyi had asked for suggestions regarding the dialogue process and they had discussed the suggestions.

'We will continue to work with Major-General Aung Kyi from now on,' he added.

The meetings came a day after United Nations envoy Ibrahim Gambari left Myanmar at the end of a six-day visit, carrying a statement by Ms Suu Kyi that said she was 'ready to cooperate with the government in order to make this process of dialogue a success'.

After initial disappointment following Professor Gambari's failure to obtain a meeting with junta supremo Senior General Than Shwe, some optimism surfaced among locals in Yangon as well as Myanmar analysts abroad following the UN envoy's meeting on Thursday with Ms Suu Kyi and her meetings yesterday.

Although proposals to set up a three-way dialogue between Prof Gambari, Ms Suu Kyi and the junta, and to set up a poverty alleviation commission, had failed, analysts said Prof Gambari's mission was not a complete failure.

'In the sense of the process, he has not failed,' Professor Win Min of Payap University in the northern Thai city of Chiang Mai told The Straits Times.

But he noted that 'in terms of substance the junta has always been uncompromising', given Gen Than Shwe's track record of not accommodating Ms Suu Kyi and even those within the regime who favoured pragmatism.

'It is good that (Minister) Aung Kyi is meeting her (Ms Suu Kyi) but not good enough unless it leads to substantive dialogue,' he added.

And he cautioned that the regime might be buying time in the face of international pressure, ahead of the Asean summit in Singapore this month.

Ms Debbie Stothard of the Alternative Asean Network on Burma (Myanmar) told The Straits Times: 'This is not so much a step forward as a tiptoe.

'What's quite clear is that Aung San Suu Kyi has reiterated her commitment to inclusive dialogue, including with all ethnic groups, but there has so far not been a matching commitment from the leadership.

'The painful lesson of the past few years is that the regime is adept at dancing one step forward and two steps back. So it is important for Asean and the international community to keep up the pressure.'

There was some guarded optimism among locals in Yangon yesterday as news of the statement by Ms Suu Kyi as well as her meetings with the NLD leaders and with Mr Aung Kyi came out.

But in a reminder of the anger that continues to seethe below the surface following last month's crackdown by the military on monks and civilians, some 50 students staged a short protest in Yangon's Botahtaung township yesterday.

They held up pictures of Gen Than Shwe with paintings of women's underwear superimposed on his head - and dispersed quickly before security forces arrived.

Another UN official, special rapporteur on human rights Paulo Sergio Pinheiro, is due in Yangon tomorrow - and Prof Gambari has also been invited to return in the next few weeks.

nirmal@sph.com.sg