Malaysia-Singapore ties have warmed since Malaysia's outspoken former prime minister Mahathir Mohamad handed power to Abdullah Ahmad Badawi late in 2003.

The new cordiality has inspired efforts to settle several outstanding issues, the bridge among them.

Officials of the two countries would begin talks on Tuesday, said Singapore Minister for Foreign Affairs George Yeo, who is on a two-day visit to Malaysia.

"This evening a team from Singapore is coming to talk to their Malaysian counterparts about that very subject," Yeo told businessmen who asked when the bridge project would be completed.

"But of course in any such discussion, it's got to be mutually beneficial," he said. "It should take into account the needs and constraints on both sides. It should not be a bridge to nowhere." He declined to give additional details.

Singapore lies at the southern tip of the Malay peninsula. The two nations separated in 1965 after a brief union in the years following independence from Britain and have deep economic ties, although relations have sometimes been prickly.

Former premier Mahathir unveiled the plan for a bridge to replace half the 500-m causeway between the neighbours in 2003, after Singapore rejected a plan to jointly build a bridge to replace the entire causeway.

Malaysia says its bridge, called the "crooked" bridge because of its convoluted design, would boost traffic flow and ease jams on its side of the 81-year-old causeway, allow ships to pass beneath and improve water quality by unblocking the strait.

Singapore opposes the original plan on cost grounds and has raised its own environmental concerns over the crooked bridge, which would merge with Singapore's half of the causeway.

In Singapore, analysts said the bridge could threaten the island's economy.

"As it is, the Singapore port is already facing stiff competition from the port in Tanjung Pelepas," Ho Khai Leong, a research fellow at the city-state's Institute of Southeast Asian Studies, told Reuters, referring to a Malaysian port.

"If Malaysia gets its way with building the bridge, then Singapore's port will lose more business," Ho added.

In 2002, the Port Authority of Singapore lost two key clients -- Taiwan's Evergreen Marine and Maersk Sealand, the world's largest container shipping firm -- to the Port of Tanjung Pelepas (PTP), prompting PSA to shelve listing plans.

Although PTP handled just 4 million 20-foot equivalent units (TEUs) last year, against PSA's 33.1 million, its volume growth since its birth in 1999 has made Singapore increasingly wary.

As talks on the bridge have dragged on, Malaysia has gone ahead with a key part of its M$1.1 billion ($292 million) project, building a customs, immigration and quarantine centre at Johor Baru, the main gateway to Malaysia from Singapore.

Malaysia says it hopes to work with Singapore on the plan for the bridge as one of a series of issues it wants to settle.

"This is the best time to look at things positively and try to find resolutions that will bring benefits to both sides," national news agency Bernama quoted Foreign Minister Syed Hamid Albar as telling reporters.

Despite the stiff economic rivalry Ho said it was unlikely Singapore would reject Malaysia's proposal for a new bridge.

"If Singapore rejects the proposal to replace the causeway, it would be very bad for Malaysia-Singapore relations," he said.

"The crooked bridge would just be a lasting monument to the two countries' thorny ties."

(Additional reporting by Fayen Wong in Singapore)

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