KUALA LUMPUR - MALAYSIAN Premier Abdullah Ahmad Badawi urged his countrymen to stop discussing race and religious issues after a dispute over comments by a ruling party member, according to reports on Sunday.

His comments come after Datuk Ahmad Ismail, a division chief in the United Malay National Orgainsation (Umno), allegedly claimed the Chinese were 'squatters' in the country.

Mr Ahmad was said to have made the statement two weeks ago while campaigning for a government candidate in a hotly contested by-election that returned opposition leader Anwar Ibrahim to parliament after a 10-year absence.

'We do not want chaos in our country. If there is chaos, no one will win. Everyone will lose and the country will face problems,' Datuk Seri Abdullah was quoted as saying in a banner headline on the front page of The New Straits Times daily.

'Things that should not have been raised and sensitive things have surfaced. This has caused anger among the various races who feel their rights and sensitivities have been overlooked or ignored,' he added.

Mr Abdullah said talk on issues such as race and religion could lead to disharmony, referring to an unwritten pact upon independence between the various races that ensures special privileges for the Malays in exchange for citizenship for Chinese and Indians.

Mr Ahmad has refused to apologise over the comment, saying he was misinterpreted and was referring to historical events, but it provoked a sharp response from within the ruling Barisan Nasional (BN) coalition, which includes Chinese and Indian component parties.

On Saturday, a state youth wing of the Malaysian Chinese Association, the main Chinese party in the BN, urged it to consider leaving the coalition if Umno leaders refused to change their attitude.

Opposition leaders have also questioned Mr Ahmad's claim, saying it took 11 days before the politician denied the allegation.

'Anyone who had been wrongly maligned or subject of a false accusation would ... make an instant response,' Mr Lim Kit Siang, a senior leader in the Pakatan Rakyat opposition alliance, said in a statement.

Muslim Malays, who make up 60 per cent of the country's population, control the government and ethnic Chinese, at 26 per cent, dominate business.

Indians, at 8.0 per cent of the population, run a distant third in terms of wealth, opportunities and education. -- AFP

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