A rare deal struck between the dominant Umno party and its rival, the Parti Islam se-Malaysia (PAS) is being hailed as a victory for the conciliatory politics of Prime Minister Abdullah Ahmad Badawi. Analysts say the agreement will soften the public perception that the two parties are entrenched in bitter opposition. It will also allow federal aid to flow to Kelantan state on the border with Thailand. The state is entirely Muslim and ruled by PAS, but is one of Malaysia's poorest. PAS suffered badly in the March election. It lost the northeastern state of Terengganu to the United Malays National Organisation and rules Kelantan tenuously, with only a three-seat majority in the Legislative Assembly. That lead could evaporate anytime if just two members defect to Umno. Under the deal hammered out late last week and described as a 'gentlemen's agreement', both parties agreed to withdraw nine election-related petitions they had filed against each other in the High Court in Kelantan. If continued, those petitions would have changed the balance of power and triggered fresh elections. Umno has tacitly agreed to let PAS rule Kelantan without interference. In return, it will be allowed to channel development aid to Kelantan and as a result improve its popularity. PAS is thankful it gets to rule Kelantan, however tenuous. Takiyuddin Hassan, who led the PAS side of the month-long negotiation, said the party was pleased with the outcome. 'Our rule in Kelantan is assured,' he said. But independent observers see the deal as a victory for Mr Abdullah's conciliatory politics and his readiness to put public interest over factional politics. 'Umno agreed to the deal because it hopes to use development aid win Malay support from PAS. But it is also a signal that the days of Mahathir-style confrontation is over,' said one analyst, referring to the autocratic style of the previous premier Mahathir Mohamad. 'It is important to show the people of Kelantan that we really care for them even though we lost the state to PAS,' said Zaid Ibrahim, the deputy chief of Umno in Kelantan. Analysts said stability in Kelantan is increasingly crucial as it borders the violence-wracked Muslim provinces of southern Thailand