The authorities fighting an outbreak of the deadly bird flu said today they had arrested two men smuggling 30,000 chickens into neighbouring Thailand.

The chickens were discovered late Monday near the Thai border in Kelantan, state veterinary services director Idris Kadir was quoted as saying by the Bernama news agency.

Idris said his officers were conducting constant checks on poultry farms after the deadly H5N1 strain of avian influenza was discovered for the first time last week in a village in Kelantan near the Thai border.

"The whole of Kelantan is being monitored with checks conducted on all chicken farms and households," he said.

Malaysia says the outbreak was restricted to one village and the two affected birds were recently taken to Thailand for a cock fight.

Hundreds culled

Hundreds of birds in the village and surrounding area have been culled and veterinary officials have launched a national inspection of poultry farms, commercial enterprises and bird parks.

Health Minister Chua Soi Lek said Monday that all seven patients admitted to hospital for checks have tested negative for the disease.

The disease killed eight people in Thailand and 19 in Vietnam earlier this year and the World Health Organisation fears the virus could mutate into a highly contagious form that triggers the next global human flu pandemic.

Malaysia's Federation of Lifestock Farmers Associations said the poultry industry was losing RM10 million daily following import bans from Singapore and other countries and urged the government to give financial aid to affected farmers.