JAKARTA, Indonesia - Indonesia, the country hardest hit by bird flu, signed a preliminary deal Wednesday with US drug manufacturer Baxter Healthcare Corp. to develop a human bird flu vaccine.

Under the memorandum of understanding, Indonesia will provide strains of the H5N1 virus circulating in the nation and Baxter will offer technical expertise to produce the vaccine, said Indonesian Health Minister Siti Fadilah Supari.

The agreement had been linked with an earlier decision by Indonesia not to share samples of the H5N1 virus with foreign laboratories, citing intellectual property rights.

Kim C. Bush, president of Baxter's vaccine unit, said the company was not involved in Indonesia's decision, which has raised fears that global research into the virus could be hampered.

"Baxter is not involved in this process and we don't intend to be involved in (it)," he told reporters. "That, we believe, is the responsibility of the Indonesian government."

Supari denied the country was preventing research into bird flu, saying that foreign laboratories must first sign an agreement stating they would only use H5N1 samples for research and diagnostic purposes, not commercial ones.

Indonesia and other poor countries have often expressed concerns - that some independent experts say are justified - that samples from viruses in their country are used to make vaccines by drug companies that they then cannot afford to buy.

"This is not fair. Small countries are always badly treated. I don't want our country to be treated like that," she said.

The deal said the drug would be made and distributed mostly in Indonesia, but did not give a date when commercial production would start.

Several countries are producing vaccines to protect against H5N1, the strain of bird flu responsible for 163 human deaths around the world, around one-third of them in Indonesia.

The virus remains essentially an animal disease, but experts fear the virus may mutate into a form easily spreadable between humans and trigger a global pandemic, possibly killing millions.

The vaccines currently under production may offer some protection against any pandemic strain, but there is no guarantee.