Washington has growing concerns about China's rise in the Pacific, where it is trying to woo nations with an array of diplomatic and financial incentives in return for strategic support.

Defence Minister Win Bakri Daki inked the deal with US Secretary of State Antony Blinken before the start of a US meeting with the leaders of 14 South Pacific island states in the capital Port Moresby.

"A defence cooperation agreement is done," Prime Minister James Marape said at the signing ceremony, adding the Pacific island was "elevating" its relationship with the United States.

Blinken said under the "fully transparent" deal each of the two nations would be able to board the other's vessels, share technical expertise and "better patrol" the seas together.

"We are working together to shape the future. We are very much looking forward to taking our partnership to the next level," he said.

- Intensifying rivalry -

In a sign of the intensifying rivalry over the South Pacific, Blinken was not alone in representing major powers aiming to counter Beijing's growing economic, political and military presence.

Indian Prime Minister Narendra Modi flew into town just hours before him on the eve of his own meeting, asserting his nation's role as a regional power.

"We support a free, open, and inclusive Indo-Pacific. We respect the sovereignty and integrity of all countries," Modi told Pacific leaders.

After making the first visit to the country by an Indian premier, Modi tweeted it was a "historic" trip.

By signing the security deal with PNG, Blinken will also expand the US military's capacity to deploy in the region.

Beijing has snapped up mines and ports across the Pacific and last year inked a secretive security pact with the Solomon Islands that allows China to deploy troops to the country.

Chinese foreign ministry spokeswoman Mao Ning on Monday said Beijing would not object to "normal exchanges" between nations but must be on guard for the use of cooperation "as a pretext for engaging in geopolitical games" in the Pacific.

- 'Illegal activities' -

The United States fears that a Chinese military foothold in the South Pacific could outflank its facilities on Guam, and make the defence of Taiwan more complicated in the event of a Chinese invasion.

The State Department said the pact with PNG would "increase stability and security in the region".

"Port Moresby is no longer the sleepy diplomatic outpost it once was," said Gordon Peake, a senior adviser for the Pacific Islands at the United States Institute of Peace.

"While China might not be mentioned anywhere in the document, it's an important subtext in this story of deepening US-PNG relations."

Marape last week said the deal would offer Washington movement in the country's waters in return for access to US satellite surveillance to battle "illegal activities on the high sea".

The deal would not prevent him from signing similar agreements with other nations, including China, he said.

- Student protests -

The agreement has also prompted student protests at several universities, PNG's biggest newspaper the Post Courier reported, over fears it gives US forces too much autonomy at some of the country's key entry points.

In Port Moresby, scores of students gathered at the University of Papua New Guinea into the evening with some setting tyres on fire. A private security guard at the university said stones were being thrown at passing vehicles.

Security was high in the capital on Monday, with roads blocked and bomb squad cars stationed around its downtown beach area close to where the leaders were meeting. Officers were also patrolling nearby waters on speedboats and jet skis.

Blinken replaced Joe Biden at the meeting after the US president cancelled the trip to take part in debt ceiling talks in Washington.

On top of the deal, the US pledged to PNG $45 million in funding to tackle organised crime, climate change and HIV/AIDS, as well as protective equipment for its military, the State Department said.

Commander of the US Indo-Pacific Command, Admiral John Aquino, also visited a barracks in Oro Province on Monday where he was met by a military parade, the Courier reported.