The outgoing chairman of the Pacific Islands Forum has called on Fijians to rise up and challenge the country's military rulers.
The 40th forum leaders' summit officially opened in Australia on Wednesday.
Fiji was suspended from the forum for the first time earlier this year, after Commodore Frank Bainimarama, who seized power in a bloodless coup in 2006, reneged on promises to hold an election in March.
Commodore Bainimarama says he will not hold elections until 2014.
Toke Talagi, the premier of Niue and outgoing forum chairman, says Fijians must take some responsibility for restoring democracy in their own country.
In a speech at the opening ceremony in Cairns, Mr Talagi condemned Fiji's military regime, saying international pressure has failed to move the interim government and it is time for the people of Fiji to act.
"Perhaps the citizens of Fiji must now rise to the challenge their undemocratic rule of the military regime and restore democracy," he said.
Australian Prime Minister and forum chairman Kevin Rudd expressed his dismay at the difficulties confronting people in Fiji, but urged a peaceful resolution to the political unrest, saying it was the only way forward.
Mr Rudd criticised the recent arrest of Methodist Church leaders by the Fijian military in July under emergency powers imposed by Commodore Bainimarama, saying it was profoundly disturbing.
The ministers were among several senior clergymen detained by police over plans to proceed with the church's annual conference, despite it being cancelled by the regime.
Mr Rudd said the forum had made its position on Fiji clear, but this week leaders will have to find ways to urge the island nation towards a fast return to democracy. "The people of Fjii deserve better and we look forward to their return to the family of democracies across our region."
Mr Rudd's sentiments were echoed by New Zealand Prime Minister John Key, who rejected Mr Talagi's comments.
"I think they are unhelpful and it's not the stance or the options that New Zealand would encourage or consider," Mr Key said. "There is a peaceful way to resolve this and we want that to happen."
Mr Key said the Fiji situation had not even been raised at the summit on Wednesday, although the nation's inclusion in a regional free trade agreement would be discussed at a leaders' retreat on Thursday.
He said Fiji's military-led government has left it with a passport to poverty and only a democratic election will allow Commodore Bainimarama a place at the forum.
Economic decisions up to Pacific nations - Key
John Key said New Zealand does not want to play the role of bully or dictator at the summit.
The New Zealand and Australian governments are due to release a report on how Pacific countries can improve their economic performance. It was commissioned to assess the impact of the global recession and how the region can better weather the economic storm.
The report outlines several areas for change, including lowering debt, greater trade liberalisation and prudent government spending.
Mr Key acknowledged there is no political consensus on some of those policies in New Zealand, even as it directs other countries to follow that course. He said he expects there will be what he calls "healthy" discussions about progressing regional trade talks at the summit.
Courses for seasonal employees
Mr Key has signalled the Government is to trial education courses for workers brought to New Zealand under the Recognised Seasonal Employer (RSE) scheme.
The scheme is now bringing more than 5000 workers to New Zealand for up to nine months at a time, with substantial economic benefits for island countries.
Mr Key said New Zealand wants to play a greater role and will set up special education courses on a trial basis.
He said there are no plans to extend the RSE beyond horticulture at this point, despite a request for such a move from the smaller Pacific nations.
