(UPDATE) SYDNEY, Australia — The United States and Fiji have started work on a key agreement that could see American troops ramp up their presence in the Pacific nation, US Defense Secretary Lloyd Austin said on Saturday.

Austin is the first sitting Pentagon chief to set foot in Fiji, a visit that caps a whirlwind Asia-Pacific tour through Australia, the Philippines and Laos.

Fiji sits in the middle of an unfolding tussle between Washington and Beijing, two powers seeking to bank influence in the strategically important South Pacific.

Austin said negotiations had started on a bilateral "status of forces" agreement with Fiji, a legal instrument setting the rules for military personnel working in a foreign country.

The agreement would pave the way for "increased exercises" and "military-to-military engagements," he added.

"The [agreement] will enable us to deploy and redeploy forces in support of Fiji. And help us train with the Fijians on a more routine basis," the defense secretary said.

Austin cautioned that there was "no notion" of a permanent US military base in the Fijian archipelago.

"We did not have any discussions like that," he told reporters.

The US has similar agreements in place with more than 100 nations, according to the US State Department.

Fijian Prime Minister Sitiveni Rabuka, a former military commander, said Austin's visit marked a "historic moment in the US-Fiji relationship."

"We all pray it's not an indication that we are looking at some dangerous years ahead," he said while sporting a stars-and-stripes-themed necktie. "We are all here to talk about peace, and how we guard and protect and promote that peace."

Rabuka is seen as broadly pro-Western but recently made an extended visit to Beijing, where he inked a slew of bilateral deals on trade, infrastructure and Chinese-language education.