The diplomatic relations between Australia and Indonesia further worsened on Thursday as Indonesian President Susilo Bambang Yudhoyono announced the suspension of cooperation on people smuggling and military cooperation over the spying row.

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The president is still seeking an official explanation from Canberra why did Australian spy agencies target his mobile phone in 2009. He will send a letter of demand to Australian Prime Minister Tony Abbott to seek an official apology and explanation even if Mr Abbott had consistently refused to do so beyond admitting that he regrets the incident caused embarrassment to Mr Yudhoyono.

Australian Defence Minister David Johnston's office said it has yet to receive official confirmation of a stop to defence cooperation activities but the office is waiting how events would play out.

Mr Yudhoyono compared the phone tapping activities of Australia, which included the mobile phones of his wife and several senior officials, to cold war strategies.

His suspension of military cooperation until everything is clear means all naval patrols would immediately stop as well as joint training of the army, navy or air force, while suspension of people smuggling cooperation would severely affect Mr Abbott's asylum seeker policies.

"Indonesia and Australia is not in the position of confronting each other or in enmity," Nine MSN quoted Mr Yudhoyono, who said he could not comprehend why Australia spied on a friend and not the enemy.

Indonesian media is backing up their president by publishing on Wednesday n the Indonesian daily Tempo a cartoon of Mr Abbott attired in outback clothes while listening to Mr Yudhoyono's phone conversation.

Ordinary Indonesians share their thoughts on the controversy In this video.

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However, Indonesia is still hopeful the row would end.

"I'm still hoping and I believe that Australia is also hoping, especially the hope of people from both countries ... that we still can have a good relationship and cooperation after we overcome this problem," said the president, who added that he still believes that Australia respects Indonesia's sovereignty.

Meanwhile, the U.S. followed the footstep of Mr Abbott in declining to comment on the issue. U.S. Secretary of State John Kerry, when asked about the diplomatic row at the end of the AUSMIN talks in Washington said, quoted by The Sydney Morning Herald, "We just don't talk about intelligence matters in public, and we're not going to begin now."

He said that while Washington would continue to work with Canberra in global counter-terrorism activities, it has great respect and affection for Jakarta.

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