Police used high-pressure water hoses to disperse protesters today, as senior officials from the Association of Southeast Asian Nations (ASEAN) forged a last-minute compromise governing territorial disputes.

ASEAN officials approved a draft of a code of conduct that requires rival claimants to refrain from "taking action that would establish presence" in the South China Sea. The code will be considered by ASEAN leaders at their annual summit this weekend in Manila.

The Spratly Islands, believed to be rich in oil and gas, are claimed in part or in whole by China and Taiwan along with four ASEAN members--Brunei, Malaysia, the Philippines and Vietnam.

The approval of the draft code of conduct was a success for the Philippines, which has tried to align ASEAN against what it sees as Chinese expansionism in the Spratly Islands. Differences over the code's geographic scope had prevented its adoption for months.

Philippine Foreign Undersecretary Lauro Baja declined to give details on the draft, and said he did not know if China would accept it. The proposed code will be presented to China on Thursday.

About 200 protesters were stopped by riot police 300 yards from the summit site along Manila Bay, and then forced back by water sprayed from three firetrucks.

The protesters say ASEAN's policy of free trade will expose Southeast Asian countries to competition from large multinational companies that will result in massive layoffs and business closures.

Carrying signs that read "ASEAN Sellout," the protesters issued a statement that urged ASEAN delegates to "wake up and accept the reality that globalization has brought more harm than good to the people of Southeast Asia."

"They're not going to make any plans that will benefit either Filipinos or people elsewhere in Southeast Asia," said Anya Silverio, a spokeswoman for the demonstrators.

Economic issues are also expected to dominate this weekend's summit as ASEAN's 10 members have been trying to rebound from the two-year-old Asian financial crisis. Some have started to recover, but others continue to struggle.