"The Malaysian army has always maintained a close cooperation with the Thai army," said General Muhammad Ismail Jamaluddin, citing regular joint border committee meetings.

 "These arrangements have been beneficial to both parties and have further strengthened cooperation of the two countries," he said in a statement.

 "I would like to reiterate that our border areas are safe," he added.

 Violence in southern Thailand is a sensitive bilateral issue, which has seen Thai officials accusing Malaysia of failing to prevent insurgents from crossing the border to stage attacks.

 The region is hit by almost daily bombings, shootings and arson attacks from an insurgency that has left nearly 2,000 dead over three years.

 Relations improved last month after a visit by Malaysian Prime Minister Abdullah Ahmad Badawi to Thailand. Both nations pledged to boost their cooperation to end unrest in southern Thailand.

 Muhammad Ismail also labelled as inaccurate a report Thursday which quoted him as saying in an interview that southern Thai provinces had become a potential breeding ground for Islamic "terrorists".

 "This report is totally misquoted or misinterpreted by the reporter," said the army chief, who took up his post on February 1.

 Muhammad Ismail said he had only talked about the prospects for the provinces if Muslim grievances were not addressed. He released what he said was his written reply to the interviewer's questions.

 "Personally I think the possibilities are there, once there is an element of unhappiness and hatred among the locals toward their government," Muhammad Ismail said in his reply.

 "They may exploit the situation to their advantage in order to gain support for their struggle," he said, when asked if there was a danger that southern Thailand could become a breeding ground for "terrorists."

 Muslims account for only five per cent of Thailand's 65 million population. They live mostly in the three southern provinces bordering majority Muslim Malaysia, and share close cultural and social ties with their neighbours.

 The region has a long history of separatist violence over the century since Thailand annexed what had been an autonomous Malay sultanate.

Agence France Presse