Air pollution from forest fires in Indonesia's Sumatra island reached severe levels in Singapore on Monday, triggering a health alert in the densely populated city-state.

Skyscrapers including the famous Marina Bay Sands casino towers were shrouded in haze and the acrid smell of burnt wood pervaded the central business district.

The Pollutant Standards Index soared to 105 at mid-afternoon, past the "unhealthy" threshold of 100, according to the National Environment Agency (NEA) website.

People with heart and lung disease, those over 65 and children are advised to "reduce prolonged or heavy outdoor exertion" even in moderate conditions, defined as a reading of 51-100.

Business and air transport have so far not been affected. Singapore schools are on holiday.

Singapore is one of the world's most densely populated countries. Most of its 5.3 million people live in high-rise apartment blocks.

Malaysia has also been affected by the haze problem, which occurs in the dry season as a result of forest fires in the sprawling Indonesian archipelago, some of them deliberately started to clear land for cultivation.

Haze reached unhealthy levels in Malaysia over the weekend.

On Monday, the Malaysian pollutant index showed unhealthy levels of between 102 and 121 in parts of the states of Pahang, Terengganu and Malacca.

In the capital Kuala Lumpur, the sky was also hazy with a reading of 82 at midday.

Southeast Asia's haze problem hit its worst level in 1997-1998, causing widespread health problems and costing the regional economy billions of dollars as a result of business and air transport disruptions.