"The Singapore government cannot and should never negotiate with terrorists," Co-ordinating Minister for Security and Defence Tony Tan told parliament.

"That would encourage more terrorists to take more of our people as hostages."

Tan made his comments after referring to the case of Filipino truck driver Angelo de la Cruz, who was taken hostage by Iraqi militants and released on Tuesday after Manila gave in to their demand to pull its troops out of Iraq.

The militants had threatened to behead the 46-year-old man if the small Filipino contingent did not withdraw. Manila's decision has come under fire from the United States, Australia and other countries.

Singapore is a key US ally in the war against terrorism and currently has 33 personnel accompanying an air force tanker aircraft helping US-led forces in Iraq.

Tan said on Tuesday the government had become "very concerned" over the past few months about possible attacks against Singapore's embassies abroad and had begun to increase security at the foreign missions.

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