Datuk Seri Najib Tun Razak also said increased cooperation among the littoral states of Malaysia, Indonesia and Singapore has reduced dramatically the incidence of piracy along the waterway.

More than 30 per cent of world trade and half the world's oil shipments pass through the funnel-shaped Malacca Strait.

He warned that a terrorist attack, which could devastate regional economies, remained a threat.

'For us to combat piracy and to prevent any possible acts of terrorism along the Straits of Malacca, one of the prerequisites is for us to share quality and timely intelligence,' Datuk Seri Najib said.

'Terrorism is a phenomenon that does not confine itself to any single country. Terrorism is fluid, it moves from one country to another, it has regional and even global networking.'

He gave an interview to Bernama in conjunction with the first Asia Pacific Intelligence Chiefs Conference to be held over three days in Kuala Lumpur from Wednesday.

Intelligence chiefs from 22 countries including the United States, Britain, France, Australia, New Zealand, China, Japan, South Korea, India, Sri Lanka and some of the Asean member countries will participate.

The meeting is being organised by the Malaysia Defence Ministry and the Malaysian army with help from the US Department of Defence.

Deputy PM Najib, who is also Defence Minister, called for armed forces in the region to share information to stamp out 'any form of terrorism'.

'We are in possession of quality intelligence but, at the same time, we don't lull ourselves into a false sense of confidence that we know and have everything,' he said.

Better coordinated patrols and new initiatives like air surveillance had resulted in the straits being declassified as a war-risk zone by Lloyds of London, he said.

This, he said, had brought tangible economic benefits as ship owners now paid lower insurance premiums on their ships.

In addition, the improved security along the straits had also helped Malaysia in the promotion of its ports like Port Klang, Penang Port and the Port of Tanjung Pelepas.

Malaysia's top police official in June warned that a terror attack on ships, the hijacking of ships carrying dangerous materials or the use of vessels to attack ports or land facilities could cripple regional economies.

Concerns surfaced last month when two Indonesian sailors were kidnapped after heavily armed pirates boarded their barge in the Strait of Malacca, the third pirate attack this year.

The men were freed last week after a ransom was paid, the International Maritime Bureau said.

AGENCE FRANCE-PRESSE, BERNAMA