MANADO, Indonesia (Reuters) - Southeast Asian nations will cooperate more closely with intelligence and law enforcement authorities from the Middle East amid "grave concerns" about an elevated threat from Islamic State (IS) in the region.

Representatives from four Southeast Asian nations, Australia and New Zealand met in the Indonesian city of Manado on Saturday to develop a response to the increased danger posed by IS, highlighted by the occupation of parts of the southern Philippines city of Marawi by militants owing allegiance to the group.

The battle has sparked alarm that as IS suffers reversals in Iraq and Syria, it is seeking to create a stronghold in the region, buttressed by Southeast Asian fighters returning from the Middle East and other militants inspired by the ultra-radical group and the Marawi conflict.

Describing the regional threat from Islamist militants as growing and rapidly evolving, a joint statement by the participants called for enhanced information sharing, as well as cooperation on border control, deradicalisation, law reform and countering Islamists' prolific use of social media to plan attacks and lure recruits.

"We must face the threat together," said Wiranto, Indonesia's co-ordinating minister for security.

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The meeting was co-hosted by Indonesia and Australia. The other participants were Malaysia, the Philippines, Brunei and New Zealand.

The main initiative was a law enforcement dialogue to be co-hosted by the Indonesian and Australian police forces in August bringing together key stakeholders affected by IS.

Two senior law enforcement sources at the Manado meeting said countries from the Middle East, including Turkey, would attend the summit to kick off cooperation across the two regions.

Islamic State has a dedicated military unit made up of hundreds of Southeast Asian fighters in Syria and Iraq led by Indonesian militant Bahrumsyah.

According to Indonesian police, there are 510 Indonesian supporters of Islamic State in Iraq and Syria, including 113 women.

About 20 Islamist fighters from Indonesia are believed by counter-terrorism authorities to be fighting in Marawi, a predominantly Muslim city on the Philippines island of Mindanao which has been a hotbed of Islamist unrest for decades and a magnet for militants from around the region.

One of leaders of the militants in Marawi is a Malaysian Islamic studies lecturer, Ahmad Mahmud, who arranged financing and the recruitment of foreign fighters.

POOR RECORD OF COOPERATION

While the Association of Southeast Asian Nations, the multilateral regional forum made up of 10 nations, has long had a framework for cooperation on combating violent extremism, analysts and officials say coordination has been poor.

A report last week from the Jakarta-based Institute for Policy Analysis of Conflict identified "formidable obstacles" to greater cooperation between Indonesia, Malaysia and the Philippines, the front-line states facing the Islamist threat in Southeast Asia.

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"These include the deep-seated political distrust between the Philippines and Malaysia that impedes information sharing; concern from Indonesia and Malaysia police about mixed loyalties of local counterparts in Mindanao, especially given clan and family links; and institutional disjunctures that give the lead in counter-terrorism to the police in Indonesia and Malaysia but to the military in the Philippines," the report said.

After more than two months of intense fighting, IS-aligned militants still control part of Marawi. Over 600 people have been killed, including 45 civilians and 114 members of the security forces. The government has said the other dead are militants.

(Reporting by Tom Allard; Editing by Raju Gopalakrishnan)