The International Court of Justice in The Hague would begin hearing arguments from Malaysia and Indonesia over a territorial claim today, said Deputy Prime Minister Abdullah Ahmad Badawi.

"We hope we will win. We are well prepared and will do our best during the two week hearing in the Netherlands," Abdullah told reporters.

Asked if Kuala Lumpur or Jakarta would lodge an appeal if they lost, he said: "Malaysia and Indonesia have agreed that we will accept the decision."

Abdullah said Malaysia was represented by Foreign Minister Syed Hamid Albar and legal officials from the attornery-general's chambers.

Later Abdullah left for Indonesia for a three-day visit to boost bilateral and economic cooperation.

The territorial dispute between the two neighbours is over two tiny islands off eastern Sabah, Sipadan and Litigan, which are a divers' paradise.

Both islands lie in the Sulawesi sea. Sipadan drew international attention in April 2000 after a band of Muslim rebels - the Abu Sayyaf gang from neighbouring Philippines - raided the island and kidnapped 21 Malaysians and foreigners.

The territorial dispute dates back to 1969 when boundaries were being drawn up by a joint committee from the two countries.

This is the first Southeast Asian territorial dispute to go to the ICJ and diplomats say it is a reflection that countries in the region are able to settle their differences through talks.

Other disputes

Another outstanding territorial dispute is the claim over the Spratly islands by China, the Philippines, Taiwan, Brunei, Malaysia and Vietnam.

There are also overlapping claims by Malaysia and Singapore to Pulau Batu Putih, an island off southern Johor.