It is a period in which both sides are attempting to erase mutual mistrust

Aung San Suu Kyi

Her comments were reported following a statement by the ruling State Peace and Development Council (SPDC) saying it was committed to creating a "functioning democracy".

They also came as her National League for Democracy (NLD) said talks with the military must start yielding more tangible results.

Over the last year, Aung San Suu Kyi has been holding secret United Nations-brokered talks with junta leaders which have raised hopes of a breakthrough.

The 1991 Nobel Peace laureate was again placed under house arrest in September 2000, 10 years after the NLD won a landslide election that the military refused to recognise.

Despite the recent contacts between the two sides, Aung San Suu Kyi stressed that the process of national reconciliation had barely begun.

Mutual mistrust

"It is not that dialogue has begun," she was quoted by Japan's Jiji Press news agency as telling former Japanese Foreign Minister Kabun Muto.

"It is a period in which both sides are attempting to erase mutual mistrust," Mr Muto quoted her as saying.

Activists around the world have been calling for Aung San Suu Kyi's release

According to the Jiji report - monitored by the AFP news agency - Mr Muto met Aung San Suu Kyi at her home in Rangoon on 4 December.

The statement from the generals, released on Monday, said they were working with Aung San Suu Kyi to find a political settlement.

"Today, we are all in the process of joining hands, walking on the same path toward our common objective," it said.

Negotiations so far have led to the release of nearly 200 political prisoners, but an estimated 1,500 remain in detention.

The NLD said on Monday that any further delays in moving towards democracy could lead to "undesirable negative effects".

"It is now necessary to develop, step by step, the confidence building talks between the SPDC and NLD into meaningful dialogues," it said in a statement carried by the Reuters news agency.

The statement was released to mark Burma's National Day.

Nobel pressure

The junta's statement directly replied to comments in Oslo by South African retired Anglican Archbishop Desmond Tutu, who said Aung San Suu Kyi was on the winning side of the conflict.

Nobel laureates, who had gathered to celebrate 100 years of the peace prize, paid tribute to Aung San Suu Kyi and called for her release.

The junta has so far ignored the global chorus calling for her release.