Bangladesh and Burma have agreed to examine the possibility of establishing direct road links for the first time.

Bangladesh's geopolitical location allows it to serve as a bridge between South Asia and South East Asia Foreign Minister Morshed Khan

An agreement was reached between Burma's military ruler, General Than Shwe, and his Bangladeshi host, Prime Minister Khaleda Zia, on the first day of the former's two-day visit to Dhaka.

A Foreign Office spokesman in Dhaka said two task forces would be set up to study the economic and technical aspects of the proposed road linking Bangladesh's port city of Chittagong with the Burmese capital, Rangoon.

It would provide each with access to East and South Asia and could transform relations between two regional bodies, the Association of South East Asian Nations and the South Asian Association for Regional Co-operation.

Earlier on Tuesday, Mrs Zia gave the Burmese leader a red carpet reception at Dhaka airport, complete with military honour guard, when he arrived on the first such trip by a Burmese leader to Bangladesh for 16 years.

Fading hostility

The proposed land route from Bangladesh through Burma to Thailand, which is high on the summit agenda, would be one of the first overland routes connecting South and South East Asia.

Both countries, whose relations have been strained for years, stand to gain a lot if the road link is built.

For nearly two decades, leaders of the two neighbouring countries have barely spoken to each other.

They have fought the occasional border skirmishes and have been at loggerheads over the presence of thousands of Muslim Burmese refugees who live in camps in south-east Bangladesh.

But diplomats from both sides say that General Than Shwe's visit shows that much of this mutual hostility could be fading away.

Trade focus

Bangladesh's Foreign Minister, Morshed Khan, stressed the advantages of his country's location in improving inter-regional ties.

"Bangladesh's geopolitical location allows it to serve as a bridge between South Asia and South-East Asia," he said.

Talk of a road link has been strongly encouraged by Thailand, which recently launched direct air links between Bangkok and the southern Bangladeshi port of Chittagong.

The two sides also agreed to boost commercial ties, and the two commerce ministers have been asked to find ways of improving bilateral trade, which is at present almost negligible.

The two ministers are expected meet in Dhaka on Wednesday to take the trade talks forward.

Diplomats say the new warmth in relations could result in Burma allowing Bangladesh to repatriate a small number of the some 20,000 refugees currently living in camps.