European Union foreign ministers have reached an agreement that will allow next month's summit with Asian countries to go ahead as planned.
The EU has demanded Aung San Suu Kyi's release
The meeting had been in doubt because of EU opposition to participation by the Burmese military government.
The EU objected to Burma's presence out of concern at its human rights record.
But the ministers have now agreed that EU representatives will take part if Rangoon only sends lower-level delegates to the summit meeting.
The EU ministers also said they would tighten sanctions against Burma, if Rangoon did not make progress towards democratisation in time for the summit.
"The European Union will... increase the support to the Burmese
people," Dutch Foreign Minister Bernard Bot, whose country holds
the EU's rotating presidency, told a news conference.
The EU has imposed numerous economic and political sanctions on the country.
It has insisted pro-democracy leader Aung San Suu Kyi is released from house arrest by the ruling military junta.
The Europe-Asia (Asem) summit - due to be held in Vietnam on 8-9 October - is held every two years and aims to forge closer economic and political ties between the two continents.