"Should there be a terrorist attack on any of your business premises, the damage to the entire industry and to Singapores socio-economic stability would be tremendous," said Ho Peng Kee, senior minister of state for law and home affairs.

"Security-related expenses are long-term investments that must be given top priority," he told a meeting of community retailers.

He urged them to hold regular gatherings to get to know each other better.

"By knowing your neighbors well, it will help you detect suspicious characters in your community," he said.

Earlier, the internal security agency enlisted taxi drivers to help conduct espionage against potential terrorists arriving in Singapore.

There are 40,000 taxi drivers here and authorities were quoted by the Straits Times as saying that this meant as many "extra pairs of eyes and ears" that police and intelligence forces could use.

Cabbies have been asked to report suspicious-looking passengers who ask unusual questions such as where to buy or rent cheap trucks, or where they can get combustible materials, according to the newspaper.

Terrorist attacks in neighboring Indonesia have heightened security concerns in Singapore, a staunch US ally which has rounded up alleged members of Jemaah Islamiyah, said to be the Southeast Asian affiliate of the Al Qaeda network.

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