Malaysia said it would cooperate with neighbouring Thailand and extradite suspected militants hiding within its borders as refugees, but only if their rights were protected.

"We have never said we will not cooperate with Thailand. We have always been cooperative," Foreign Minister Syed Hamid Albar told reporters.

His comments were made when asked about reports that Thailand sought cooperation from Malaysia in extraditing suspected militants believed to be among 131 Thai Muslims who fled across the border in August.

The refugees, mostly from Thailand's southern Narathiwat province, crossed into Malaysia in late August saying they feared for their lives in the region, which is in the grip of an Islamic separatist insurgency and other violence.

Their action triggered a diplomatic spat between the neighbours.

Protect their rights

He said mainly-Muslim Malaysia was ready to have discussions over the Thai Muslims but reiterated that the government was "bound by international law" to ensure their rights were protected before returning them to Thailand.

"But to hand over anyone, we need to be satisfied that everything pertaining to human rights, due process and rule of law is complied with. We need to be certain of that," Syed Hamid said.

"They are not illegal immigrants. They say they are fleeing what is happening in Thailand."

Malaysian deputy prime minister Najib Razak said last week the country would not release the refugees to Thailand unless it received an assurance their rights would not be violated by the Thai government.

Since January 2004 southern Thailand has been rocked by more than 950 deaths. Authorities blame the violence on a complex web of Islamic separatists, organised crime and local corruption.