Finance chiefs of Asia-Pacific nations agree that they should do all they can to contain the downside risks from the Israel-Hamas war, U.S. Treasury Secretary Janet Yellen said Monday.

At a press conference after the conclusion of a two-day meeting of finance ministers in San Francisco, Yellen said that while the global economic impact from the conflict has been limited so far, they believe it is critical that the war does not escalate.

"I believe there was a strongly shared view that it's important for all of us to work to do everything we can to contain the conflict between Israel and Hamas, so that it doesn't become a broader regional conflict," she said.

"If it does, it could pose risks to the global outlook that all of us would be concerned about," said Yellen, who chaired the gathering of 21 members of the Asia-Pacific Economic Cooperation forum.

U.S. Treasury Secretary Janet Yellen attends a press conference after holding talks with China's Vice Premier He Lifeng in San Francisco on Nov. 10, 2023. (Kyodo)

The meeting came ahead of the APEC leaders' summit later this week, at a time when reaching a consensus among the diverse group on a range of issues related to the economy, trade and investment appears difficult.

With Russia and China in the group, deep divisions have been evident since the start of the war in Ukraine in February 2022.

Yellen said the finance ministers achieved progress on major issues, including regulating digital assets and sustainable finance to support the region's growth, adding they agreed to adopt policies aimed at expanding economic output capacity.

The Middle East conflict has raised uncertainty over the outlook for the world economy, already hit by Russia's war in Ukraine, aggressive interest rate hikes in countries such as the United States and a slowdown in Asian powerhouse China.

In the run-up to a high-stakes meeting between U.S. President Joe Biden and Chinese President Xi Jinping on the APEC sidelines, Yellen said that responsibly managing bilateral economic ties has been a key priority for her in San Francisco.

"President Biden and I believe strongly in advancing the values we share with our allies and partners, in the Asia-Pacific and beyond, while also pursuing a healthy and stable economic relationship with China," she told the press conference.

APEC ministerial talks are set to take place on Tuesday and Wednesday, smoothing the way for the leaders' gathering that will follow and end Friday.

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