KUALA LUMPUR, Feb 14 (AFP) - Malaysia laid on a royal welcome for Indonesian President Susilo Bambang Yudhoyono Monday ahead of talks expected to include the sensitive issues of illegal migration and Islamic militancy.

King Tuanku Syed Sirajuddin joined Prime Minister Abdullah Ahmad Badawi, cabinet ministers and diplomats at a ceremony in Parliament Square where Yudhoyono was accorded a 21-gun salute and inspected a guard of honour.

The formal pomp and ceremony was to be followed almost immediately by private talks between the two leaders before they were joined by their delegations, with the fate of hundreds of thousands of illegal Indonesian workers in Malaysia expected to top the agenda.

Malaysia has reluctantly extended a conditional amnesty for illegal immigrants after a plea from Indonesia, which said it was ill prepared to handle mass deportations after the December 26 tsunami disaster.

But Kuala Lumpur has warned that a threatened crackdown under which illegal workers could be jailed and whipped would go ahead if they do not take the opportunity to go home voluntarily, with the chance of returning legally.

For its part, Jakarta has complained that some Malaysian companies are refusing to pay the illegal workers ahead of their expulsion and has engaged lawyers to take legal action against them — a move which has annoyed some officials in Kuala Lumpur.

Yudhoyono is accompanied by eight senior ministers for the two-day visit, which is expected to also include discussions on Malaysia’s role in the reconstruction of Indonesia’s tsunami-hit Aceh province, economic and trade cooperation and how to contain the rise of Islamic fundamentalism.

Two of Indonesia’s most wanted terrorism suspects are Malaysians — former university professor Azahari Husin and Noordin Mohammed Top, who are accused of playing leading roles in the Al-Qaeda-linked Jemaah Islamiyah regional terror group.

They are wanted for a series of attacks including the 2002 Bali bombings, which killed 202 people, the Jakarta Marriott hotel attacks in 2003 in which 12 people died, and last year’s strike on the Australian embassy in Jakarta which left 10 people dead.

Yudhoyono, who was sworn into office last October, made arresting the pair among his top priorities in his first 100 days in office, but the deadline passed and the two remain at large.

Malaysia, which is holding more than 80 suspected Islamic militants without trial, has pledged full support for Indonesia’s attempts to capture the two men.

The Indonesian president chose Malaysia to kick off a traditional round of visits by new leaders to fellow members of the Association of Southeast Asian Nations (ASEAN), a move which Malaysia’s Home Affairs Minister Azmi Khalid said "reflects the closeness of the two neighbours".

But, he said, the illegal immigrant problem "will definitely be on the agenda".

Before the amnesty began on October 29 last year, Malaysia estimated there were more than a million illegal workers in the country, mostly from Indonesia but also from the Philippines, Myanmar, Bangladesh, India and Sri Lanka.