NEW YORK (AFP) - The government has been sharply criticised by Human Rights Watch in its latest annual report for "continued crack down on potential political challengers, arresting key opposition leaders, banning political rallies and breaking up public gatherings with force".

After the Sept 11 attacks in the United States, the government used global concern over terrorism to justify its use of detention without trial, said the report, which was released on Wednesday.

The US administration also "shifted its position on Malaysia" in the wake of the terror attacks, apparently dropping human rights conditions for a meeting between prime minister Dr Mahathir Mohamad and President George W Bush.

The two men met on the sidelines of a regional summit in Shanghai in late October, and Malaysia has won praise from the US for its support in the fight against terrorism.

The dropped conditions reportedly concerned progress on the case of jailed former deputy prime minister Anwar Ibrahim and in the treatment of political dissidents, Human Rights Watch said.

Anwar was sacked and detained in September 1998 and is now appealing against prison sentences of a total of 15 years for corruption and sodomy.

Critics say the charges were trumped up to prevent a political challenge to Mahathir, who has been in power for 20 years. The government denies this.

Anwar supporters were among those targeted for detention without trial last year, while others were minority Shi'a Muslims and youth leaders in the opposition PAS, Human Rights Watch said.

Some of the dozens of detainees are said by the authorities to be members of the Malaysian Mujahidin Group (KMM), Afghanistan-trained militants allegedly planning the violent overthrow of the government.

Restricted press freedom

In July, the report said, the government banned all political rallies, stating that they would undermine the country's security.

It also "maintained important restrictions on press freedom", requiring newspapers to obtain annual licences to publish.

The PAS publication Harakah , formerly a biweekly, continued to be restricted to two issues per month for allegedly breaching the terms of its license by selling to non-PAS members.

"In March, editions of both the Far Eastern Economic Review and Asiaweek , which had been chronicling the growing opposition to Mahathir and signs of political unrest, were held back by government censors," the report said.

"Mahathir had complained that the photo of him on the cover of an earlier edition of Asiaweek had made him look like 'an idiot'."

Human Rights Watch said serious questions remained about the independence of the judiciary, but that a number of developments suggested the appointment of respected jurist Mohamed Dzaiddin Abdullah as chief justice was beginning to have a positive impact.