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By Kanupriya Kapoor and Lincoln Feast
JAKARTA/SYDNEY (Reuters) - The leaders of Indonesia and Australia traded punches on Tuesday in a row over alleged spying by Canberra, with both sides refusing to back down in a growing rift between the two often uneasy neighbors.
Indonesian President Susilo Bambang Yudhoyono used Twitter, following the recall of Indonesia's ambassador to Australia the previous day, to accuse Australian Prime Minister Tony Abbott of dismissing his country's concerns.
Abbott, in office since September, rejected calls for an explanation, describing surveillance by Australian governments as "reasonable intelligence operations".
The latest flare-up followed Australian media reports, quoting documents leaked by former U.S. National Security Agency contractor Edward Snowden, that Australian spy agencies had tried to tap the mobile phones of Yudhoyono, his wife and senior officials.
Reports last month said Australia's Jakarta embassy had been part of a U.S.-led surveillance network to spy on Indonesia.
"I ... regret the statement of Australian Prime Minister that belittled this tapping matter on Indonesia, without any remorse," he wrote. He did not say to which statement by Abbott he was referring.
"These U.S. & Australian actions have certainly damaged the strategic partnerships with Indonesia, as fellow democracies," Yudhoyono tweeted.
Indonesia, he wrote, "demands an official response, one that can be understood by the public".
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Abbott was unrepentant.
"I don't believe that Australia should be expected to apologize for reasonable intelligence gathering operations, just as I don't expect other countries or other governments to apologize for their reasonable intelligence gathering operations," he told parliament.
Earlier he told reporters that the two countries had a very good relationship, but added: "Obviously today may not be the best day in that relationship.
He pledged never to undertake any action that would damage ties with Indonesia, "which is, all in all - our most important relationship".
Australia and Indonesia have a long and turbulent history in their relations.
In 2009, an Indonesian officer admitted the military had killed five foreign journalists, including two Australians, to cover up the early stages of its 1975 invasion of East Timor.
Indonesia recalled its ambassador to Australia in 2006 in protest over a decision to grant temporary visas to 42 asylum seekers from the Indonesian province of West Papua.
Relations had improved more recently, helped by the settling of a disagreement over live cattle exports to Indonesia. But they have deteriorated under Abbott in the face of disagreements over the handling the politically charged issue of asylum seekers trying to reach Australia via Indonesia.
Indonesian Foreign Minister Marty Natalegawa recalled the ambassador to Canberra, calling the reported eavesdropping "nothing less than an unfriendly act ... (that) has a serious impact on bilateral relations".
Australia's former Foreign Minister Bob Carr, now in opposition, told Australian Broadcasting Corp radio: "I think this is nothing short of catastrophic."
He warned that the fallout from the spying spat could extend into Indonesia's presidential elections next year.
"None of the half dozen suggested names for the next president is going to find it easy to do anything but lambast Australia and our treatment of Indonesia," Carr said, calling on Foreign Minister Julia Bishop to apologize to Indonesia.
(Editing by Jonathan Thatcher and Ron Popeski)