CANBERRA (AP) - Australia plans to restore limited military cooperation with Myanmar and increase business ties with the Southeast Asian nation.

President Thein Sein on Sunday became the first Myanmar leader to visit Australia since 1974. He held a rare news conference beside Prime Minister Julia Gillard on Monday at Australia's Parliament House.

Mrs Gillard said in recognition of Myanmar's moves toward democracy, Australia will soon post a defence attache to the Australian Embassy in Myanmar. But Australia's arms embargo on Myanmar will remain.

She said: "Australia wants to encourage the development of a modern, professional defense force in Myanmar, which continues to support democratisation and reform."

Mr Thein Sein asked for Australian understanding of the political challenges facing his resource rich but impoverished country.