THE HAGUE - The world court in The Hague ruled today that two tiny resource-rich islands in the Sulawesi Sea belong to Malaysia, ending a longstanding territorial dispute between Kuala Lumpur and Jakarta.

"The court, by 16 votes to one, finds that sovereignty over Pulau Ligitan and Pulau Sipadan belongs to Malaysia," presiding judge Gilbert Guillaume said.

Foreign Minister Syed Hamid Albar welcomed the decision, telling journalists here: "Malaysia has never doubted that the islands belong to us."

He added: "This will not affect our relations with Indonesia. We have shown that we can settle disputes peacefully, as neighbours."

In its ruling the International Court of Justice (ICJ) rejected claims by both countries that they had sovereignty over Ligitan and Sipadan based on treaties signed in the late 19th century by their respective colonial powers, Britain and the Netherlands.

Instead the world court said Kuala Lumpur had shown that it had asserted authority over the islands, notably in the 1930s with several environmental regulations, while Indonesia did not protest Malaysia's actions until 1969.