* Philippines in dispute with China over contested shoal
* Clinton says U.S. monitoring situation closely
WASHINGTON - U.S. President Barack Obama called on Friday for clear rules to resolve maritime disputes in the South China Sea and throughout the Pacific, a region where the United States is trying to increase its strategic heft.
Speaking to reporters after hosting Filipino President Benigno Aquino in the Oval Office, Obama said it was critical to avoid escalation of conflicts over strategic waterways and shipping routes.
"We discussed not only military and economic issues, but also regional issues, for example trying to make sure that we have a strong set of international norms and rules governing maritime disputes in the region," Obama said.
Washington has been helping Manila, a treaty ally, strengthen its modest military capacities in the face of a confrontation with China over contested South China Sea reefs.
Aquino did not refer specifically to that conflict in his remarks to the press, but said the meeting with Obama "deepened and strengthened a very long relationship we have, especially as we face the challenges that are before both our countries."
The White House later said the leaders "underscored the importance of the principles of ensuring freedom of navigation, respect for international law, and unimpeded lawful commerce."
"They expressed firm support for a collaborative diplomatic process among claimants to resolve territorial disputes in a manner consistent with international law and without coercion or the use of force," it said.
The United States, colonial ruler of the Philippines from 1898-1946 and a treaty ally since 1951, is formally neutral on South China Sea territorial disputes.
But Washington's encouragement of multilateral discussions pits it against China, which has insisted on bilateral talks with its weaker neighbors to resolve conflicts.
Manila is in a showdown with China over the Scarborough Shoal, a horseshoe-shaped reef near the Philippines in waters both countries claim, and has sought to upgrade its defense posture with ships, aircraft and surveillance equipment.
Earlier on Friday, U.S. Secretary of State Hillary Clinton said the United States was not taking sides in the Manila-Beijing standoff but had a clear interest in ensuring free navigation, unimpeded commerce and stability in the South China Sea.
"We encourage continued diplomatic dialogue and further efforts to lessen tension, to disengage, and to resolve the situation peacefully," she said of the Scarborough dispute.
Clinton said the United States opposed "the use of force or coercion by any claimant to advance its claims."
"We will continue to monitor the situation closely," she said, while calling on the Association of Southeast Asian Nations, of which the Philippines is a member, and China to reach a consensus on a code of conduct for the South China Sea. (Additional reporting by Andrew Quinn and Paul Eckert; Editing by David Brunnstrom)