(Adds capsizing details, fresh quotes, political background)
CANBERRA, June 27 (Reuters) - A boat carrying around 150 suspected asylum seekers capsized on Wednesday between Indonesia and Australia's Christmas Island in the Indian Ocean, the second such incident in less than week, highlighting Australia's struggle to stem the flow of boatpeople.
A maritime rescue was underway with two merchant ships on site, said Australian authorities. Last week, a boat carrying around 200 suspected asylum seekers capsized in the same area, killing around 90 lives.
"The vessel has capsized, there are people in the water," Australian Maritime Safety Authority (AMSA) spokeswoman Jo Meehan told Australian television.
"There are survivors and they will be recovering survivors. Reports are the conditions are fair, not ideal."
A photograph of the boat before it capsized, released by AMSA, showed a heavily crowded boat, which looks like it is made of timber. The photo showed calm seas in the area, about 200 kms (125 miles) north of Christmas Island and 185 kms (115 miles) south of Indonesia.
The latest incidents have reignited a heated political debate over refugee policy and border security in Australia, despite the fact the country only receives a few thousand asylum-seekers by boat each year.
The government has agreement with Malaysia to process asylum seekers, but the opposition refuses to support the plan in Australia's parliament, preferring to re-open an offshore detention centre on the remote Pacific Island of Nauru.
The waters between Indonesia and Christmas Island are a popular route for asylum seekers, who transit through Indonesia with the help of people smugglers in often overcrowded boats.
So far this year, more than 50 boats carrying more than 4,000 asylum seekers have been detected by Australian authorities.
The trip is often dangerous. In December 2011, as many as 200 died when an overcrowded boat sank off the coast of East Java. In 2010, 50 asylum seekers died when their boat was thrown onto rocks at Christmas Island.
In 2001, a crowded boat known as the SIEV X sank on its way to Australia with the loss of 350 lives.
(Reporting By Maggie Lu Yueyang; Editing by Michael Perry)