By Lesley Wroughton

HANOI (Reuters) - The United States on Monday offered $32.5 million in assistance to Southeast Asian nations, more than half to Vietnam, to boost maritime security, which comes as tension grows with China over rival claims in the South China Sea.

On his first visit to Vietnam as secretary of state, John Kerry denied that the assistance had anything to do with China. He however called for "intensified negotiations and diplomatic initiatives" between China and Japan on resolving differences in the East China Sea.

Kerry said up to $18 million of the funds would go toward strengthening Vietnam's coastal patrols to help its coastguard react quicker to search and rescue missions, and for disasters. The funding would also be used to buy five "fast" patrol boats for Vietnam's coastguard in 2014, he added.

"This announcement has nothing to do with a recent announcement by any other country," Kerry told a joint news conference with his Vietnamese counterpart, Pham Binh Minh.

"This is part of a gradual and deliberate expansion that has been planned for some period of time which we have been working on," he said, adding: "This is really an ongoing policy and not some kind of quickly-conceived reaction" to increased tension.

Still, Kerry said the United States opposed "coercion and aggressive tactics" to advance territorial claims, saying any disputes should be resolved through international institutions.

China claims almost the entire oil- and gas-rich South China Sea, overlapping in different places with claims made by Taiwan, Malaysia, Brunei, the Philippines and Vietnam.

The United States has said it is neutral in the dispute - centered on China's historic claim of waters deep in the maritime heart of Southeast Asia - but is determined to preserve peace and ensure that sea-lanes vital for the world economy are not hindered.

China also has disputes with Japan and South Korea over different sets of tiny islands in the East China Sea.

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HUMAN RIGHTS CONCERNS

While announcing closer cooperation between the United States and Vietnam on a range of issues from the economy to education, climate change and trade, Kerry said he had raised U.S. concerns with Minh over Vietnam's human rights record.

"This is something we talked about openly and frankly ... Vietnam needs to show continued progress on human rights and freedoms, including the freedom of religion, the freedom of expression and freedom of association," he said.

A group of 47 lawmakers in the U.S. House of Representatives wrote to Kerry before his visit to Vietnam urging him to tie trade talks to progress on human rights.

Vietnam is part of a group of a dozen countries negotiating the Trans-Pacific Partnership trade agreement. A deal would establish a free-trade bloc stretching from Vietnam to Chile and Japan, encompassing some 800 million people and almost 40 percent of the global economy.

"There is some progress that is being made and we would encourage more progress to be made," Kerry said referring to Vietnam's record on rights.

"This is an ongoing conversation, absolutely."

Kerry said he had raised individual cases of abuse during his meeting with Minh, although he gave no further details. "We had a very direct and healthy exchange about this," he said.

Minh described his meeting with Kerry as "constructive" and acknowledged differences with the United States over rights.

"The secretary and I also agreed that the two sides maintain candid and constructive dialogue on issues of differences including human rights," he said, speaking through an interpreter.

(Editing by Robert Birsel and Clarence Fernandez)