Southeast Asian leaders are set to wrap up a summit dominated by efforts to defuse tensions over the South China Sea and deepen economic links throughout the region.

The 10-member Association of Southeast Asian Nations (ASEAN) endured deep divisions last year over how to handle rows with China over the sea, and leaders have been focused at this week's talks in Brunei on rebuilding unity.

Philippine President Benigno Aquino said after an initial gathering on Wednesday night, a dinner hosted by Brunei's Sultan Hassanal Bolkiah, that the leaders had succeeded in finding common ground on the flashpoint issue.

"Everybody is interested in having a peaceful resolution and also in voicing ... concern that there have been increasing disputes," Aquino told reporters.

China says it has sovereign rights to nearly all of the South China Sea.

But ASEAN members the Philippines, Vietnam, Malaysia and Brunei, as well as Taiwan, also claim parts of the strategically vital and resource-rich body of water.

The competing claims have for decades made the sea one of Asia's potential powderkegs for military conflict, and concerns have risen in recent years as China has become increasingly aggressive in staking its claim.

Among the actions that have caused alarm were China's occupying of a shoal close to the Philippines' main island last year, and the deployment last month of Chinese naval ships to within 80 kilometres of Malaysia's coast.

Top priority
Aquino said on Wednesday night that he was pleased Brunei had made the South China Sea issue a top priority at this week's summit, and for future talks throughout the year.

"We should really be thankful that the whole of the ASEAN is willing to discuss this instead of putting it on the backburner," Aquino said, although he noted Cambodian Prime Minister Hun Sen may still raise objections on Thursday.

The leaders had a "retreat" session at the Brunei prime minister's office on Thursday morning, which was to be followed by a lunch.

The Philippines and Vietnam have been pushing for ASEAN to try and pressure China into agreeing to a long-awaited and legally binding code of conduct for the sea.

But China, which prefers to negotiate directly with individual countries rather than a united ASEAN bloc, has refused to begin meaningful talks on the code.

Southeast Asian diplomats in Brunei said they did not expect progress on the code, first proposed in 2002, anytime soon.

But Aquino said he was nevertheless happy ASEAN was now at least united in trying to ensure the disputes did not "become bloody".

"So there is unity of purpose and one can always be hopeful that that will lead to something more concrete," he said.

One of the other key issues on the agenda during the summit is pressing ahead with deeper economic integration within ASEAN, and other countries in the region.

The bloc is aiming to create a single market for the 10 Southeast Asian countries and its 600 million people, known as the ASEAN Economic Community (AEC), by 2015.

More than three quarters of the blueprint for the AEC has been agreed upon but Aquino and others involved said the most difficult areas were yet to be addressed.