A Western diplomat said Singaporean politicians he had spoken with ``expect Malaysia to keep ratcheting up'' differences with Singapore as a way to distract the Malaysian public from domestic problems during a regional financial crisis.

Malaysia might go further in disputes than it had before as economic and political problems were now so serious, he said. Last week saw the release of memoirs by Lee Kuan Yew, Singapore's prime minister for 31 years until 1990, in which he made critical comments about Malaysian leaders in the 1960s.

Singapore was part of the Malaysian Federation from 1963 to 1965, but ties between the overwhelmingly ethnic Chinese islandand the predominantly Malay and Moslem peninsula were fragile. In his memoirs, Lee accused Malaysian politicians of instigating race riots in Singapore in 1964 which killed 23 people.

Lee's memoirs sparked blasts from current Malaysian politicians, including prime minister Mahathir Mohamad, alleging Singaporean insensitivity and unfriendliness.

On Thursday, Malaysia announced restrictions -- without prior consultation -- on Singapore Air Force jets entering its airspace and halted combined search and rescue operations and exercises. Some analysts have speculated the airspace move was linked to the release of senior minister Lee's memoirs.

``It was the old, old story replayed once more, of the antagonism towards Singapore that Malaysia never seems to be able to shake off,'' columnist Chua wrote of Malaysia's reaction.

Recent disputes between the two countries have ranged from water supplies, a Malaysian railway that runs through the city state, and expatriate Malaysian workers' pension funds inSingapore.

Most analysts hesitated to speculate what could happen next, but noted the strong trade, investment and other ties between the two neighbours. The best course for Singapore at the moment may be to lie low, the western diplomat said, adding: ``The Singaporeans are not entirely blameless in all this.'' Singapore tends to get very legalistic and technical in its arguments and not recognise how that may not be the best way to deal with emotional feelings and nationalism, the diplomat said. ``It's odd for a people who put so much emphasis on face,'' he said, arguing that Singapore could do more to recognise others' need to preserve face.

Analysts urged both sides to avoid provocative reactions that might make the situation worse.``Both the media and the leaders should be careful and don't over-react. Malaysia is in a beleaguered mood at the moment,'' said Bruce Gale of Political and Economic Risk Consultancy. ``We can express views, but don't be provocative. It's not going to help anything,'' saidpolitical science professor Lee Lai To at the National University of Singapore.

In a weekend forum in the Straits Times, writers supported Lee and hit out at Malaysian leaders.In a typical letter, Heng Yong Chiang said: ``Its (Malaysia's) leaders have little integrity and they change policies overnight according to their whim.''But some media stories noted past friendly ties.