Naypyidaw: US President Barack Obama will hold talks with Myanmar`s democracy champion Aung San Suu Kyi in Yangon Friday as the nation turns towards next year`s elections with uncertainty over the direction of reforms.
Suu Kyi`s National League for Democracy party is widely expected to sweep polls in late 2015, but its figurehead is banned from the presidency by a constitutional clause.
Obama arrives in Yangon, the country`s commercial hub, fresh from talks after the East Asia Summit in Naypyidaw with his Myanmar counterpart Thein Sein, who has overseen reforms since 2011.
After hour-long discussions late Thursday, Obama emerged with an message of hope for the once-cloistered nation that balanced out earlier warnings on the risks of "backsliding" on the transition.
"The democratic process in Myanmar is real," Obama said.
"We recognise change is hard and you do not always move in a straight line but I`m optimistic."
During his two-night trip the US leader has also raised alarm over the direction of reforms, citing the cramping of freedom of expression, ongoing conflicts and the treatment of Myanmar`s minority groups -- especially the Muslim Rohingya group.
The two Nobel laureates are scheduled to meet on Friday morning at the British colonial-era secretariat building in downtown Yangon where Suu Kyi`s father, independence hero General Aung San, was gunned down by political rivals 1947.
They are later expected to hold talks at Suu Kyi`s lakeside family home, where she spent years under house arrest by the generals for her freedom struggle until her release in 2010.
It is a reprise of their landmark meeting in 2012, when Obama received a fanfare welcome from thrilled locals a year after Thein Sein began to open the country.
Most political prisoners have been released and elections have seen Suu Kyi become a lawmaker, while foreign investors have arrived in lockstep with the rollback of most sanctions.
But the atmosphere has slowly soured with many observers saying reforms have stalled.
Suu Kyi cautioned against US "over-optimism" ahead of Obama`s visit, with even her star power earned as the torch-bearer of democracy during the dark junta years having waned in the eyes of some.
For his part Obama has been battered domestically with poor approval numbers compounded by a thumping defeat for his Democrats in last week`s mid-term elections.
He has invested a large amount of political capital in Myanmar`s transition from military rule and hopes his second visit will chivvy along the process as elections edge closer.
His visit has coincided with the start of a debate on constitutional reform, in particular over the clauses effectively blocking a presidential bid by Suu Kyi and reserving 25 percent of seats for the military.
While Obama is cautiously optimistic on the long game for impoverished Myanmar, many ordinary people are not as easily convinced.
"I wondered when Obama first came, whether things will be better," 52-year-old street stall holder Minny Oo Aung told AFP in Yangon.
"But there has been no improvement in our society or economy."