Singapore and Malaysia, whose governments are locked in dispute over water supplies and other issues, have begun an annual naval exercise in the Malacca Strait, a joint statement said today.

The exercise, code-named Ex Malapura, began on Tuesday and will end next Monday, said the statement from the defence ministries of both countries. The Royal Malaysian Navy is hosting this year's manoeuvres.

"The exercise, conducted in the Malacca Strait, will involve a total of seven ships from the two navies," the statement said.

"Maritime patrol and fighter aircraft from the Royal Malaysian Air Force will also be supporting the exercise."

Frosty ties

It said the annual exercise "provides the opportunity for all participants to foster better understanding and it enhances the good working relationship between the two navies."

Both Singapore and Malaysia are members of the Five Power Defence Arrangement along with Australia, Britain and New Zealand.

Singapore, an island without substantial natural resources, was evicted from a federation with Malaysia to become an independent republic in 1965 and has risen to become one of Asia's most modern countries.

The neighbours have since been embroiled in a dispute over the price of water that Malaysia supplies to Singapore.

Other irritants to bilateral ties include a proposed new bridge linking the countries, use of Malaysian airspace by Singaporean aircraft and ownership of a rocky islet claimed by both nations. - AFP