Singapore and Malaysia will hold talks this week to address outstanding matters topped by a fresh dispute over a proposed new bridge to replace a British colonial-era causeway, officials said today.

A dispute over plans for the bridge has re-introduced a sour note into a relationship that has improved markedly in the past two years since the retirement of Malaysia's combative Prime Minister Dr Mahathir Mohamad.

Mahathir's successor Abdullah Ahmad Badawi was reported over the weekend to have given his approval to the new bridge, but Singapore quickly responded by saying talks were still going on and "we should not prejudge the outcome."

Singapore's ministry of foreign affairs also stressed that the two countries had already agreed "it would not be helpful to publicise the details of these discussions."

A ministry spokesman said senior officials from the two sides are to meet for two days starting Wednesday in Malaysia's administrative capital Putrajaya near Kuala Lumpur.

Malaysia's New Straits Times newspaper reported Sunday that Abdullah had given approval for the new bridge to replace the causeway, which is more than 80 years old and often choked with traffic.

In 2000, the cost of a new bridge was estimated at around US$170 million with the two countries splitting the bill evenly, it said.

Long-term water supply issue

A modern bridge bypassing urban centers - known as the Second Link - already operates between Malaysia and Singapore but the historic causeway, which goes directly into southern Malaysia's Johor Bahru city, is still favoured by many motorists.

The report said Malaysia wants to start work on its half of the new bridge even though Singapore has yet to announce plans to build the other half over the narrow Johor Strait that separates them.

Last year, the two neighbours signed an agreement to settle a long-running dispute over Singapore's land reclamation works, seen as a landmark decision marking a new thaw in relations.

"The government wants the formula and spirit of cooperation shown in settling the land reclamation issue to be used again by Singapore to settle the new bridge issue," Malaysian Foreign Minister Syed Hamid Albar was quoted as saying by the official Bernama news agency Monday.

"Although the new bridge issue has not been resolved, we believe it can be done through consultation," he said.

The Malaysian minister said the government was also committed to building a new US$540 million customs, immigration and quarantine complex that would serve traffic from the new bridge.

Other issues between the neighbours include long-term water supply to Singapore, Singapore's military access to Malaysian airspace, the future of Malaysian-owned railway land inside Singapore and rival claims to a rocky islet.

Relations have periodically been rocked by disputes since Singapore was ejected from the Malaysian federation in August 1965 but Mahathir's retirement in October 2003 was seen as an opportunity to get rid of old animosities.