Malaysia has proposed building the bridge to replace the one-kilometer (0.6-mile) causeway connecting the two countries, but Singapore wants the project to be part of a package aimed at resolving all outstanding diplomatic disputes between the neighbors.

Malaysian Foreign Minister Syed Hamid Albar said weekend meetings between the two countries had yielded the "main points of agreement for the building of a full bridge," the New Straits Times newspaper reported.

Details of the discussions were not immediately available, but the report said Singapore is seeking to use Malaysian airspace to train its pilots in return for constructing its portion of the bridge.

Singapore, a resource-poor city-state with a population of 4.2 million, does not have sufficient airspace for air force training maneuvers.

Syed Hamid said the use of Malaysian airspace by the Singapore armed forces would not compromise the country's sovereignty, the newspaper said.

Malaysian officials could not immediately be reached for comment on Monday.

Malaysia has reportedly already begun construction of its half of the bridge in southern Johor state bordering Singapore.

In comments reported on Singapore's Channel NewsAsia Web site Sunday, Singapore Foreign Minister George Yeo said he was surprised and disappointed by the unilateral decision to build.

More than 100,000 people cross the 80-year-old causeway daily, and Malaysia says a new bridge would ease congestion and boost the flow of traffic.

The project had been part of an earlier deal that included contentious talks on Malaysia's supply of water to Singapore and other issues, but negotiations stopped in 2002 without a resolution.

Singapore and Malaysia have a history of diplomatic spats, but have close economic and cultural ties.

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