Warning that escalating food and fuel prices could lead to disaster, a group of developing Muslim nations called on Tuesday for urgent measures to lift food and oil output and a rethink on biofuels.

Malaysia and Indonesia, the world's largest producers of palm oil, told the summit of eight developing Muslim-majority countries, that they wanted to see an end to the conversion of arable land for biofuel production.

Palm oil is used as a feedstock to produce biofuel and also widely consumed in the region as cooking oil.

Leaders of the eight nations comprising nearly 1 billion people said at the summit in Kuala Lumpur that the twin problems of food and energy security were putting a severe strain on their countries, especially on the poor.

The group of Developing Eight (D8) countries - Iran, Indonesia, Egypt, Malaysia, Turkey, Pakistan, Nigeria and Bangladesh - represent about 1 billion people, or 14 percent of the world's population.

Iran President Mahmoud Ahmadinejad said the grouping must plan a future without "bullying powers".

"With comprehensive cooperation and consultation, the D8 can formulate a road map to overcome crises it is facing," the Iranian news agency quoted him as telling the meeting.

Indonesia, the world's most populous Muslim nation, said soaring rice prices would mean that many in the developing world would have less to eat.

"We must act on it once and in concert. To delay action on this great challenge of our time is to court disaster," Indonesian President Susilo Bambang Yudhoyono told the meeting.

He then flew off to Japan to attend an annual summit of Group of Eight wealthy nations as a guest.

Ahmadinejad lashed out at the G8 in a letter to a Japanese newspaper on Tuesday, saying their policies would "accelerate them along the road to a precipice", and reiterated he would not accept demands to halt uranium enrichment.

In his letter, he said the world had entered an era of fundamental change, ending a world order controlled by a single powerful nation.

BIOFUEL FRENZY

Malaysian Prime Minister Abdullah Ahmad Badawi also painted a gloomy picture of the crisis, which has seen crude oil prices at record highs and food prices rising by more than 75 percent since 2000.

"There is also the danger of the food crisis creating political unrest in many societies," he said. "I think this meeting must come out with a clear message on the need to boost food production in the world."

Both Abdullah's and Yudhoyono's popularity in their countries have slumped because of fuel price hikes, which also sparked public anger and numerous street protests.

The D8 leaders were expected to discuss a Malaysian proposal for joint investments in food-related projects such as a fertilizer plant.

"If we can have a big economic project, a big fertiliser project as a D8 project to cater for the needs of its members as well as for exports, I think that will be very good," Abdullah told Reuters in an interview on Monday. Fertiliser plants use gas and naphtha as feedstock.

Yudhoyono and Abdullah told the meeting that the biofuel frenzy has worsened the global food crisis.

"We must not allow the zeal for energy security to come into direct conflict with the basic needs for food production," Abdullah said.

An estimated 1 percent of the world's arable land is used for biofuels, a figure that will rise to between 2.5 and 3.8 percent by 2030, depending on policy incentives in different countries, according to International Energy Agency figures.

And use of food such as maize, palm oil and sugar to produce biofuel has been blamed in part for record high commodity prices which are driving millions of people into hunger.

But the expansion of Malaysia and Indonesia's palm oil-driven biodiesel industry has been hampered by sky-high prices of the commodity which is also used in hundreds of food products and in a wide range of consumer goods from soap to cosmetics.