The leaders of Malaysia and Australia disagreed today over whether foreign troops should withdraw from Iraq, but agreed that Palestine was the root of conflict in the Middle East.

Prime Minister Abdullah Ahmad Badawi, chairman of the Organisation of the 57-nation Organization of the Islamic Conference, said after talks with Australia's John Howard that the goal should be for US-led troops to withdraw.

But Howard, who is under increasing pressure to announce a timetable for pulling out Australian troops from Iraq, said the two leaders had agreed to disagree.

"It's right and fair to say that our perspective on the matter is not the same. But we are old enough and good enough friends to respect and accept that, and we both realise the importance of achieving stability in Iraq," he said.

"We both agree very strongly that at the heart of so many problems in the Middle East is the issue of Palestine," he told a joint press conference at the start of a two-day visit to Malaysia.

Howard backed a "two-state solution" where Palestinians could live in peace and Israel would be "free from constant harassment, behind the fence of internationally recognised borders".

The Australian premier is in Malaysia to reciprocate Abdullah's visit last year. Ties between the two nations have warmed significantly since former premier Dr Mahathir Mohamad stood down three years ago.

"I think it's fair to say that our bilateral relationship now is as strong as it's ever been," Howard said at the press conference.

Mahathir, a political firebrand who often crossed swords with Canberra over economic and political issues, had opposed accepting Australia and New Zealand as partners in the region.