An explosion occurred outside the Australian High Commission in Kuala Lumpur late yesterday but police has ruled out the possibility of a terrorist attack.

However, the US Embassy in Kuala Lumpur said it has been warned by the Malaysian government of an "anonymous, unverified threat" in the city centre.

"The American embassy in Kuala Lumpur has received information from the Malaysian government regarding an anonymous, unverified threat in central Kuala Lumpur," it said in an advisory to US citizens here.

"The US government is working with the Malaysian authorities to try to verify this information. American citizens may notice an increase in security around Kuala Lumpur as a precautionary measure."

A police spokesman at the city district headquarters said they were not aware of the threat, but patrols have been stepped up after the incident at the Australian High Commission. Security sources said they did not think the two incidents were linked.

District police chief Kamal Pasha Jamal told AFP that police patrolling the city-centre Australian Embassy and passers-by heard "a loud bang and saw a flash from a vehicle passing in front of the high commission" around 8pm yesterday.

The bomb squad, forensics team and tracker dogs were immediately deployed to the scene and the road in front of the embassy was cordoned off, but no injuries or damage to property were reported, he said.

"No, definitely not a terrorist attack. We found no sulfur or anything to indicate it was a bomb. It may have been a car backfiring," he said.

"There is no threat. The case is closed."

Details sketchy

In Canberra, a spokesman for Australian Foreign Minister Alexander Downer said details of the explosion were sketchy but he also dismissed it as a terrorist threat.

"We are going to seek a briefing from the Malaysian police but there is no suggestion of any specific threat to Australian interests," the spokesman said.

The high commission was attacked in March last year when a speeding car threw a small explosive device into its compound, sparking a security scare.

Malaysia has had no major terrorist attacks on its own soil, but has detained scores of alleged Muslim militants accused of membership in regional groups such as Jemaah Islamiyah, which authorities say has some links with Al-Qaeda.

The police have set up a special security squad to protect foreign embassies. Most Western embassies here also have already put their own tight security systems in place.