PKR de-facto leader Anwar Ibrahim will sue Umno deputy youth chief Khairy Jamaluddin for calling him a Jewish agent and a traitor to the Malay cause.

"My lawyer will take action by issuing a legal notice to Khairy," Anwar told several hundred party members during a PKR function in Kuala Lumpur last night.

Present were party vice-president Azmin Ali and party strategic director Saifuddin Nasution Ismail.

While not specifying the amount sought, Anwar said the legal letter will be sent today.

"Because Khairy said he would hound me everywhere... when you say 'hound', it reminds me of the song 'Hound Dog' by Elvis Presley."

"Khairy said he would hound me because he said I was a traitor to the Malays and an agent of America and the Jews," he said.

Breaking into the Presley's song, Anwar told party members that Khairy was no friend of his.

"Please go back, Google the song. I don't have to answer Khairy, and but only this to say: You ain't nothing but a hound dog, crying all the time. You said you was high classed, that was just a lie. You ain't never caught a rabbit and you ain't a friend of mine," he sang.

Tomorrow is the 30th anniversary of the death of the king of rock 'n roll.

Khairy had called Anwar a "traitor to the Malay cause" during a state Umno youth gathering in Kuala Kangsar on Aug 5.

"Anwar is a puppet of the United States and the Jews, thus he must be hounded until there is no more place for him to run to," he was quoted as saying by The Star .

Khairy also said Anwar wanted to abolish the affirmative-action New Economic Policy (NEP) because wanted to "win the support of the non-Malays."

Drama Hindustan

During a press conference later, Anwar said he had initially wanted to ignore the remarks.

"But my legal counsel said the allegations was specified accusing me a puppet of the United States, the Jews, being used by the Chinese."

"Umno used the racial card ... I have consistently disbelieved the notion that the present Umno leaders are championing the cause of the Malays. They are championing the interest of their families and their cronies," he said.

Anwar also said he would accept Khairy's challenge to contest within the Federal Territory of Kuala Lumpur in the next general election.

"He said he dares me to contest in Wilayah Persekutuan. I say this is drama Hindustan . You use the government to deny the right of a person, then you challenge him to contest.

"He knows that if you allow me to contest, I am willing to contest in WP," said Anwar. The PKR leader is only eligible to contest after April next year.