Opposition leader Aung San Suu Kyi has been under detention for 14 of the past 20 years [EPA]

The Nobel peace laureate, who has been under detention for 14 of the past 20 years, appealed against her latest conviction in August for breaking the terms of her last period of house arrest.

But unnamed sources from the military government said the Yangon division court upheld the conviction on Friday and rejected the appeal as unwarranted.

Aung San Suu Kyi was sentenced in August to a further 18 months of house arrest for sheltering an uninvited American intruder after he swam to her lakeside home in May.

The American, John Yettaw, was sentenced to seven years in prison but soon after released on humanitarian grounds and deported.

The court had initially sentenced Aung San Suu Kyi had to three years in jail with hard labour, but that sentence was immediately reduced to 18 months house arrest on the orders of Myanmar's top leader, Senior General Than Shwe.

The detention prevents her from contesting in general elections the military government says it will hold next year.

Friday's rejection of the appeal comes about a week after the US signalled a sharp shift in its policy towards Myanmar.

Acknowledging that the past policy of isolation and punishment had failed to produce desired results, Hillary Clinton, the US secretary of state, said Washington would now engage directly with the country's military government.

In announcing that Washington would employ engagement and sanctions to pursue its goals with Myanmar, she repeated demands that Aung San Suu Kyi be immediately released.

Aung San Suu Kyi, through her lawyer, had welcomed the US announcement, saying that "direct engagement is good", though qualifying that it should be with both the government and opposition.

Myanmar's military government, however, appeared unmoved by the US policy shift or the opposition leader's endorsement of it.

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