Prime Minister Dr Mahathir Mohamad's party holds its annual assembly this week with an agenda topped by preparations for next elections, sensitive educational reforms and religious issues.

Umno, backbone of the governing Barisan Nasional coalition, will seek to consolidate its revival as a moderate force in a multi-cultural country where the main opposition comes from Islamic hardliners.

General elections are not due until late 2004 but party activists are getting ready for possible early polls with one clear objective - to recapture seats lost to PAS in 1999.

PAS holds 27 of Malaysia's 193 federal parliament seats and controls two states - Kelantan and Terengganu - out of 13.

"We are gearing up for the general election. There may not necessarily be an early election but we are intensifying our preparations, focusing on the ground to ensure our house is in order," Umno youth wing secretary Zulkifli Alwi told AFP .

Umno's traditional power base is the ethnic Malay majority, but support eroded after the sacking and jailing of Mahathir's popular former deputy Anwar Ibrahim in 1998.

Mahathir, who marks 21 years in power next month, has since moved to reconsolidate power and deftly used the Sept 11 attacks in the United States as an opportunity to portray himself as a modern and centrist Muslim opposed to terrorism and fundamentalism.

The government has over the past year detained without trial 62 suspected local militants, including some PAS members, under a strict security law.

Going offensive

Information Minister Khalil Yaakob, who is UMNO secretary general, said the Sept 11 attacks had strengthened the party but it was not resting on its laurels.

"It was beneficial for the party but we had done a lot of work before that," he told AFP .

"We are not looking inward any more because most of the internal problems have been settled... Umno is now going on the offensive."

Another Umno official said there was still much work to be done as the party had only won back an estimated 30 percent of Malay support lost in the 1999 polls.

Zulkifli said some 110,000 new recruits had joined the party since June last year, with many former members and fence-sitters returning to the fold.

"We don't think we are out of the woods yet but we have regained some grounds compared to the last three years. The current situation has given us the breathing space to focus on our agenda to bring progress for the Malays."

The tide may have changed for the 2.9-million-member party but recent moves to reduce preferential treatment for Malays in education under a three-decade old affirmative action program caused a new headache.

Many Umno members baulked at the government's move last month to let 10 percent of ethnic Chinese and Indians into government junior colleges, for decades the preserve of Malay students only, to inject competition and integrate the races.

This came on the heels of the implementation of meritocracy for entry into public universities, which previously reserved a 55 percent quota for Malays and other indigenous groups, 35 percent for Chinese and 10 percent for Indians.

Unhappy with meritocracy

The government is also to introduce the use of English to teach science and mathematics, now being taught in Malay, in primary schools from next year.

"It is an open secret that many Malays are unhappy with meritocracy in education and the change in status quo after 30 years. The party has to allay fears that they are losing out," said a senior Umno member.

Mahathir will explain his stance on the educational reforms in his keynote address Thursday, with religion, economic growth and terrorism also likely to be highlighted.

The veteran premier will give a closed-door briefing to delegates Tuesday, followed Wednesday by meetings of the youth and womens' wings and a new group called Puteri Umno, set up last year to woo Malay women aged between 18 and 35.