JAKARTA - Indonesia has urged Saudi Arabia and Iran to exercise restraint amidst the rising tensions between the two countries, said its Foreign Minister Retno Marsudi on Thursday (Jan 7).

She added that as the country with the largest Muslim population in the world, Indonesia will also continue to be a key driver in spreading the values of Islam, .

"Peace in the Middle East will be heavily influenced by the relations between Saudi Arabia and Iran," said Ms Retno as she issued the Ministry of Foreign Affairs' annual statement to the press to kickstart the diplomatic calendar for 2016. "At the same time, the world is also facing many challenges that cannot be resolved in previous years such as extremism and terrorism."

On the diplomatic crisis between Saudi Arabia, a Sunni superpower, and the Shi'ite-dominated Iran, Ms Retno has urged both parties to exercise restraint. "Indonesia is a good friend of Arab Saudi and Iran," she said. "Based on (our) deep concerns over peace and stability in the Middle East, in the last few days Indonesia has carried out intensive communications with Saudi Arabia, Iran and a number of other countries. We will continue all necessary efforts to prevent the situation from worsening."

Ms Retno also underlined in her speech, the importance of Asean and how the group of South-east Asian nations holds a strategic role in maintaining regional security and economic stability in the region.

"With such a strategic role, Indonesia (will) continue to underline the importance of Asean unity and centrality," said Ms Retno, adding that Indonesia has an important role in Asean, and that the country will continue to ensure that the benefits of the grouping will reach the people in the region, leaving no one behind.

The minister also reiterated the importance of peace and stability in the South China Sea.

She said Indonesia, while being a non-claimant state in the dispute, continues to encourage claimant states such as China to settle disputes amicably and the also push for an early conclusion of the Code of Conduct for the South China Sea.

In addition, Ms Retno also conveyed Indonesia's concern over the hydrogen bomb test conducted by North Korea on Wednesday (Jan 6).

"As a good friend, Indonesia calls upon North Korea to implement all related (United Nations) Security Council's resolutions," she added.