Jakarta, Nov 9 (DPA) US President Barack Obama finally made a much-anticipated return to Indonesia Tuesday, a country where he spent part of his childhood.

Obama had twice cancelled trips to Indonesia this year because of domestic concerns, and many Indonesians had wondered whether he would make it this time.

The US president was greeted by members of the Indonesian cabinet and held talks with President Susilo Bambang Yudhoyono.

"It's great to be here. It's wonderful to see you all," Obama told dignitaries at the presidential palace.

He greeted reporters with "Apa kabar?" - Indonesian for "How are you?" - as he was photographed shaking hands with Yudhoyono.

Foreign Minister Marty Natalegawa said Obama's visit would mark the launch of a comprehensive partnership between Indonesia and the US.

"As you know, the United States has a desire to deepen and expand cooperation with Indonesia as an equal partner, cooperation which is forward-looking in nature," Natalegawa said.

Many Indonesians fondly call Obama "Anak Menteng", or "Menteng Kid", after a Jakarta neighbourhood where he lived from 1967 to 1971 after his mother married an Indonesian.

A group calling itself Friends of Obama was throwing a "homecoming" party Tuesday to welcome the return of Obama, known among his childhood friends in Jakarta as Barry.

A replica of a statue of Obama as a 10-year-old would be on display at the event. The original is located at Obama's former elementary school in Menteng.

"We were very enthusiastic to welcome Obama, and his cancellations deeply disappointed us," school principal Hasimah, who like many Indonesians uses only one name, was quoted as saying by the Antara news agency.

During his brief visit, Obama was scheduled Wednesday to visit Indonesia's largest mosque, Istiqlal, as part of his efforts to engage Muslims.

He was also to deliver a speech at the University of Indonesia.

White House spokesman Robert Gibbs told reporters that Obama was likely to cut short the visit because ash from Merapi volcano, which has been erupting since last month, could disrupt air traffic.

But he said the White House hoped the speech would still occur.

Defence Minister Purnomo Yusgiantoro said his ministry was seeking wide-ranging defence cooperation with the US, including training of officers and military financing.

"It is being done gradually, and the arrangements are being formulated," he said.

US Defence Secretary Robert Gates announced in July during a visit to Jakarta that the US was lifting a decade-old ban on cooperation with the Indonesian army's Kopassus special forces.

The ban was put in place over alleged human rights abuses by the unit.