Osservatore Romano/European Pressphoto Agency

VATICAN CITY—The Vatican and Malaysia established diplomatic relations Monday at a time of tension between Muslims and religious minorities in the Southeast Asian nation.

The Vatican announced the agreement after Pope Benedict XVI met with Malaysia’s prime minister, only the second meeting between a head of government from the Southeast Asian nation and a pontiff. The first was in 2002 for talks focusing on Christian-Muslim relations.

In recent years, religious minority groups in Malaysia have complained of discrimination by the country’s Muslim majority. Roman Catholics and other Christians compromise nearly 10% of Malaysia’s 28 million people.

And Monday Malaysia’s government-linked media claimed that foreign Jewish groups might try to use an opposition-backed push to reform electoral laws to interfere in Malaysia, an accusation that the activists who recently organized the country’s biggest street demonstration in years called an irresponsible attempt to discredit them through appeals to religious prejudice.

The Vatican said Prime Minister Najib Razak met with Benedict at the pope’s summer residence in Castelgandolfo in the Alban Hills south of Rome and then with other top Vatican officials.

“In the cordial conversations the positive developments in bilateral relations were discussed and an agreement was reached to establish diplomatic relations between Malaysia and the Holy See,” the Vatican statement said. They also discussed the importance of cultural and religious dialogue for the promotion of peace and justice, it said.

Malaysia was one of fewer than 20 countries in the world that didn’t have formal diplomatic ties with the Vatican.

The Roman Catholic church’s newspaper in Malaysia has been embroiled in a legal battle against a government ban on the use of “Allah” as a Malay-language translation for God.

A court in December 2009 granted non-Muslims the right to use the word, but anger among some Muslims sparked a series of arson attacks and vandalism against churches.

Some Muslims complain that using “Allah” by Christians to refer to God might confuse Muslims and tempt them to convert. The government has appealed the court verdict.

It was not known if that issue was raised in the prime minister’s talks.

The Malay-language Utusan Malaysia daily said in an editorial Monday that Malaysians “cannot allow anyone, especially the Jews, to interfere secretly in this country’s business.” It offered no evidence of a possible Jewish plot and named no specific group.

The editorial was the latest effort by the newspaper to defend a government crackdown on at least 20,000 people who marched in Kuala Lumpur on July 9 demanding more transparency in electoral laws ahead of national polls widely expected by mid-2012.

Police unleashed tear gas and chemical-laced water on the demonstrators and detained nearly 1,700 of them for several hours.