Abdullah and Goh, who is now Singapore's special envoy to Malaysia, held a second round of talks in the government administrative capital Putrajaya to follow-up their first meeting in December to resolve a deadlock in negotiations.

"Both of them had a constructive discussion on outstanding bilateral issues between Malaysia and Singapore," according to a joint statement issued by the prime minister's department here.

"Their discussion has enabled both countries to make progress towards an amicable solution to these issues. They agreed on the steps to move the discussion forward. Both sides agreed that it would not be helpful, at this juncture, to publicise the details of the discussion."

The talks were also attended by Singapore Deputy Prime Minister and Law Minister Shunmugam Jayakumar and Malaysian Foreign Minister Syed Hamid Albar.

Syed Hamid over the weekend said the second meeting marked a renewed push to boost bilateral relations after four decades of rocky ties since Singapore's ejection from the Malaysian federation in 1965.

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, Singapore's military access to Malaysian airspace and a proposed one billion ringgit (263 million dollars) new bridge linking the two countries.

Negotiations were deadlocked under former premir Mahathir Mohamad in 2002 but signs of a rapprochement between the two nations, separated only by the narrow Johor Strait, have grown since his retirement in 2003.

Syed Hamid said the government was pushing for a solution to the bridge problem because its customs, immigration and quarantine complex would be ready this year and a delay would hike up the cost of the project.

Previously when Singapore rejected Malaysia's proposal for a modern bridge to replace the 80-year-old causeway across the Johor Strait, former premier Mahathir Mohamad 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.

But Abdullah in December presented a new design for a conventional straight bridge linking the two sides. Goh has said Singapore would review the project to ensure "balanced benefits."

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