She was speaking at a banquet hosted by her in honour of the visiting Singaporean prime minister at the Bangladesh-China Friendship Conference Centre.

The banquet was attended, among others, by Speaker Jamiruddin Sircar, ministers, judges, MPs, politicians, businessmen, academics, journalists, entourage of the visiting dignitary and senior civil and military officials.

Khaleda praised the rapid transformation of Singaporean economy into an Asian Tiger, which she said has become a role model of discipline and efficiency in the region.

She mentioned the efforts of her government in improving the lot of the people, consolidating multiparty democracy and establishment of the rule of law in Bangladesh.

The prime minister said her government is trying to achieve sustained economic growth, pursuing an investment-friendly economy driven by a vibrant private sector.

Khaleda also mentioned the numerous projects for empowerment of women, poverty alleviation, mass education and basic healthcare.

She said Singapore has been an important partner in development of human resources and capacity building in Bangladesh.

Khaleda referred to the coordinated efforts of both Bangladesh and Singapore in bilateral and global issues, including fight against international terrorism, regional security, environment protection and economic development.

She expressed gratitude for Singapore's support in Bangladesh's effort to be a dialogue partner of Asean and a full member of Asean Regional Forum.

Expressing her belief that Tong's visit would add new dimensions to the bilateral relations, Khaleda said: "This landmark visit befittingly goes in line with my government's "Look East" policy initiative.

Speaking at the banquet, Singaporean Prime Minister Goh Chok Tong said the Investment Guarantee Agreement (IGA) that will be signed tomorrow (today) is a significant affirmation of growing economic partnership between Bangladesh and Singapore.

He said Singapore was the first Asian Country to formally recognise Bangladesh in February 1972. "Since then our friendship has grown. I hope my visit will stimulate bilateral cooperation and enhance relations to a higher plane."

Tong said the economies of South Asia are performing well and when Finance Minister Saifur Rahman visited Singapore recently, he had informed the prime minister that a 6-7 percent growth was projected for Bangladesh in 2005.

"With your Look East policy Bangladesh is also well positioned to ride on East Asia's growth. I believe that the potential South Asia region is only waiting to be unleashed."

However, the potential cannot be fully realised unless peace and stability are assured. "The scourge of terrorism is threatening all civilised countries. It threatens our peaceful way of life and our hope for a better future," said the visiting prime minister.

Terrorism does not distinguish religions, nationalities or races, he said.

"All countries must unite to fight common enemy, not just militarily but also ideologically against the deviant interpretation of Islam," he said.

But the ideological battle against the extremists must be for primarily Muslims themselves. "They can't afford Islam to be hijacked by the terrorists for their own political ends."

A moderate Muslim country like Bangladesh must play a leading role in fighting against terrorism, said the prime minister of the prosperous island-state.

"Let us work together for the peace and stability of our regions and the prosperity and future of our two peoples," Tong urged.

Earlier in the afternoon, Goh Chok Tong was accorded a red carpet reception on his arrival at Zia International Airport on a three-day official visit to Bangladesh. His arrival was heralded with 19-gun salute.

Tong is leading a 30-member delegation that includes Minister in the Prime Minister's Office and Second Minister for Foreign Affairs Lee Yock Suan, Minister for Home Affairs Wong Kan Seng and Minister for Manpower Dr Ng Eng Hen.

A baby girl presented him a bouquet as he alighted from his aircraft. Prime Minister Khaleda Zia received him.

Official talks between the two countries will be held today.