Prime Minister Abdullah Ahmad Badawi and Singapore's former premier Goh Chok Tong presented an upbeat assessment of chances of resolving the issues in revived negotiations after a two-hour meeting in Malaysia's administrative capital of Putrajaya.

"(The issues) are not very difficult," Abdullah told a joint news conference with Goh, who is now Singapore's special envoy to Malaysia, a position created in October to capitalise on rapidly improving relations.

"We believe they can be resolved as quickly as possible. We are aware that we do not have a definite agreement in terms of details but the agreement we have together is that we have to move forward," Abdullah said.

Goh told reporters that one of the general principles agreed upon was that solutions must lead to mutual benefits and not disadvantage the other party.

"We must not allow future relationships between Singapore and Malaysia to be held hostage by past issues. We are happy we are able to move the process forward on old issues," he said.

Separated by the narrow Johor Strait, the two nations have endured an uneasy relationship since Singapore's ejection from the Malaysian federation in 1965, but signs of a rapprochement have grown since the retirement last year of Malaysia's former premier Mahathir Mohamad.

Among the wide range of disputes are the price of raw water that Malaysia supplies to Singapore, rival claims to a rocky islet, the future of Malaysian-owned railway land inside Singapore and a proposed new bridge linking the two countries.

Negotiations were deadlocked under Mahathir in 2002, but his notoriously confrontational negotiating style has been replaced by Abdullah's more diplomatic approach.

He and Goh announced that they had agreed that ministers and officials would resume talks ahead of another meeting between the two men in two months time.

"The discussions certainly have been successful from the point of view that we are moving forward and not allowing it to stall," Abdullah said.

On one of the quirkier issues, a bridge between the two countries, Abdullah presented a new design and Goh said "we are prepared to have a look at the bridge and how we can have balanced benefits which will then enable the bridge to proceed".

Previously, when Singapore rejected Malaysia's suggestion that the 80-year-old causeway across the Johor Strait should be replaced by a modern bridge, Mahathir came up with the idea of what became known as "the crooked half-bridge".

The 1.45 kilometre (0.9 mile) half-bridge would have carried an eight-lane highway some 25 metres above the strait before curving and descending gently to link up with the low-level causeway from Singapore at the water border between the two countries.

The new design presented by Abdullah is for a conventional straight bridge linking the two sides.

The nature of the bargaining over these long-standing disputes was made clear by Goh's reference to a request that Singaporean air force planes should be allowed to use Malaysian airspace.

"On airspace Malaysia will consider allowing RSAF aircraft to use Malaysian airspace. If that could be done I would have no hesitation in releasing CPF funds to Malaysia," he said, referring to pension fund payments made by Malaysians working in Singapore.


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