SINGAPORE began its biggest ever anti-terror drill Monday, simulating a major assault similar to last year's attacks by militants that killed 166 people in the Indian city of Mumbai.

About 2,000 participants from 15 government agencies and the media took part in the exercise aimed to test the country's contingency plans and readiness to respond to a similar incident, the Singapore police said.

Dubbed Exercise North Star VII, the drill involves seaborne 'terrorist' assault teams landing on the island-state's southern coast at dawn and fanning out to wreak mayhem on hotels, shopping malls and an underground train station.

'Apart from raising public awareness and boosting public confidence, the exercise also serves to test and validate the contingency plans as well as the operational readiness of the emergency response forces,' the police said in a statement.

As well as the police, the drill also involves crack military units, civil defence forces, the internal security department, the foreign ministry, the hotel association, the train operator and the health ministry, among others. Phase one of the exercise was carried out Monday and continues on Tuesday.

Phase two will be staged on July 15 and involves a hostage situation at a high-end hotel.

In the November 26-29, 2008 attacks in Mumbai, 10 Islamist extremist gunmen entered the city on a rubber dinghy and went on a 60-hour rampage, killing 166 people and injuring more than 300.

Singapore, one of Asia's most affluent cities and a regional base for thousands of multinational companies, is a prime target for attacks by militant groups, officials have said.

One of the plots foiled by Singapore authorities was a plan by Islamic militants to hijack an airliner in Bangkok and crash it into Changi airport in 2001 following the September 11 attacks that year in the United States.

Singapore has also arrested several militants involved in a plot to bomb the US embassy and other targets in the city-state.

» View the photos here