"You have transformed Malaysia into a modern, progressive and confident nation," Goh said in a letter made public hours after the Malaysian leader, in power for 22 years, handed over power to his deputy, Abdullah Ahmad Badawi.

"Singapore and Malaysia share many common interests despite the complexities of our bilateral relations. In recent years, various issues have arisen, putting relations under some strain," Goh said.

"But I believe that given goodwill on both sides, we can resolve these disagreements and strengthen our cooperation. The potential benefits of working together are great. We should do our best to forge a constructive and productive partnership that benefits both our peoples."

Since their bitter separation in 1965, when largely ethnic Chinese Singapore was kicked out of the Malaysian federation, the two countries have had testy relations despite having close economic, cultural and family links.

Singapore has often been at the receiving end of the 77-year-old Mahathir's sharp tongue, but Goh lauded him for a "smooth leadership transition" and said the new Malaysian leader "is well-placed to build on your achievements."

In a separate letter, Goh congratulated Abdullah, 63, and said he was taking over Malaysia "at a time of great change and uncertainty in the world."

Goh invited Mahathir's handpicked successor to make a visit to Singapore "at your earliest convenience" and again emphasized the need for good ties.

"You will lead a Malaysia that has been transformed by many years of steady growth, and is confident of its future. You have the unique opportunity to build on the achievements of Dr Mahathir and other leaders before him," Goh said.

The two nations have many unresolved issues, some dating back to the British colonial period.

They are locked in a legal battle over land reclamation work being done by Singapore in waters between their borders, with the International Tribunal for the Law of the Sea currently considering the matter.

Other sources of tension include the price of raw water Malaysia supplies to Singapore, a prospective bridge linking the countries, the use of Malaysian airspace by Singaporean military aircraft, and ownership of a rocky islet.

Most recently, Singapore said this month that it wants the location of Malaysian immigration and customs facilities located at a railway station in the heart of Singapore, a throwback to the British colonial era, moved closer to their border.


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