Prime Minister Mahathir Mohamad today brushed off a threat by the US Senate to cut RM4.6 million (US$1.2 million) in military aid over his criticism of Jews.

"It doesn't make any difference to us. We don't really need that money. I think we can find that one million dollars here," Mahathir told an impromptu news conference.

He also appeared to imply that the Senate vote was proof of his claim that Jews rule the world by proxy.

"They are very annoyed about what I said about the Jews. This is their reaction, so what I say is true."

The US Senate voted unanimously yesterday to tie the military training aid to a report by the State Department determining whether Malaysia "supports and promote religious freedoms, including tolerance for people of the Jewish faith".

The move still needs to win support from the House of Representatives, which has already passed a resolution condemning Mahathir over his remarks at the summit of the Organisation of the Islamic Conference in mid-October.

Mahathir said then: "The Europeans killed six million Jews out of 12 million. But today the Jews rule this world by proxy. They get others to fight and die for them."

Today, in response to the Senate vote, he said: "They (the US) want to dictate to the world. We are all being run by the US Senate."

Ties nosedived

Malaysia's relations with Washington have nosedived after reaching a high point in May last year when Mahathir was welcomed at the White House by President George W Bush to be thanked personally for his support in the war on terrorism.

Since then, while maintaining his strong condemnation of terrorism and detaining local Islamic militants, Mahathir has been increasingly critical of Bush's handling of the campaign.

He has accused the US of using the war on terrorism as a pretext for a war on Islam, and predicted that invading Iraq would simply inflame Muslim hatred of the US and create more terrorists.

Mahathir retires on Friday after running this moderate mainly-Muslim country, which has large practising Christian, Hindu and Buddhist minorities, for the past 22 years.

Malaysia has no diplomatic relations with Israel, and Mahathir regularly points to the plight of the Palestinians as a root cause of Islamic terrorism.

His lack of concern about the one million dollars in military aid can be judged against Malaysia's recent orders for Russian fighter jets, French submarines, Polish tanks and British missile systems running into billions of dollars.