Often seen as squabbling siblings, relations between Malaysia and Singapore continue to see-saw between cooperation and mistrust, confounding ordinary citizens and officials alike.

They are among Southeast Asia's most developed nations and major trading partners whose people are intimately interlinked, but they still struggle to overcome historical antipathies dating back to the British colonial era.

In the latest installment, Malaysia abruptly dropped plans to build a new bridge joining the countries after nearly a decade of prickly negotiations with Singapore.

Citing public opposition to concede to Singapore the use of Malaysian airspace and its sand for the city-state's vital land reclamation projects, Prime Minister Abdullah Ahmad Badawi pulled the plug on talks on Wednesday.

While analysts in both countries have hailed Abdullah's decision as pragmatic, the development has left a bad aftertaste for some Malaysians.

"It is still unfortunate that Singapore has still not learned to be a good neighbour, continuing to be preoccupied with its uncompromising attitude on only gains," wrote editor Wong Chun Wai in the Malaysian Star daily on Saturday.

But in Singapore, analysts said the move was seen as a "pleasant surprise".

"The important thing to watch is what the two sides do next," said Simon Tay, chairman of Singapore Institute of International Affairs.

"Both have developed an audience which tends to treat this as a football match, so both sides cannot be seen to be throwing the game away," he said.

The friction dates back to the late 1800s in the era of British colonialism, when Singapore was built up as the region's most vibrant port.

While the two were briefly united in 1963 under the Malaysian federation, Singapore was ejected in 1965.

Outdoing each other

Arising from the separation is what many have called an "abang-adik" (older brother-younger brother) psychology, with tussles arising from the two trying to command each other's respect.

"The two are like Siamese twins locked in a love-hate relationship. They have deep differences between them but can't leave each other," said Yang Razali Kassim, senior fellow with the Institute of Defence and Strategic Studies in Singapore.

"They want to make the best of their relationship, but there is this baggage which hinders the good progress they have made on many fronts," he said.

Rarely addressed but crucial to the bilateral dynamic is their differing racial composition, with Malaysia a majority-ethnic Malay nation, and Singapore a mostly Chinese one.

"When people in Singapore think of the mainland, they think of Malays, and when people there think of Singapore, they think of Chinese," said historian Khoo Kay Kim from the University of Malaya.

The difference in ethnicity and worldviews - Singapore has adopted a Westernised approach, while Malaysia's relations are tied to Malay cultural mores - has led to a clash of styles which stymies talks, analysts say.

Amongst the more bitter quarrels dogging relations are those over the price of raw water that Malaysia sells to Singapore.

A heated row over water saw resource-scarce Singapore in January 2003 sensationally release diplomatic correspondence to prove Malaysia's "constant flip-flops" on setting a price.

That, along with rival claims to a rocky islet, elevated temperatures so much that Singapore was forced to denounce alleged "loose talk of war" by Malaysian politicians in early 2003.

Amidst the disputes, an intense rivalry has also developed between the two, with Malaysia aspiring to challenge Singapore's status as a regional centre for commerce and trade.

In the most recent round of one-upmanship, both countries dashed to open the region's first low-cost airline terminal, with Malaysia narrowly scraping in first by days.

"What's really holding back the two sides is a mindset that one is always trying to outdo the other," said Yang Razali.