SINGAPORE (Reuters) - Air pollution in Singapore and Malaysia rose to unhealthy levels on Monday thanks to illegal forest clearing in Indonesia, prompting Singapore to advise people against staying outdoors for long and to urge Indonesia to do something to stop it.

In usually clear Singapore, the pollutant standards index hit the highest level in nearly seven years, with the taste of smoke hitting the back of the throat even in air-conditioned offices and the subway.

"Given the current hazy conditions, it is advised that children, the elderly and those with heart or lung diseases reduce prolonged or heavy outdoor activities," Singapore's National Environment Agency said in a statement.

"Everyone else should limit prolonged or heavy outdoor activities."

The agency said the haze was caused by forest fires on the Indonesian island of Sumatra and that it was expected to last for a few days.

It said it had "urged the Indonesian authorities to look into urgent measures to mitigate the transboundary haze occurrence".

In Malaysia, the air quality reached unhealthy levels in several northeastern states as well as the southern state of Malacca, a UNESCO heritage site popular with tourists, the country's Department of Environment said.

The illegal clearing of forests by burning is a recurrent problem in Indonesia, particularly during the annual dry season that typically stretches from June to September.

In 1997 and 1998, the smog disrupted air and sea traffic, causing an estimated $9 billion in terms of economic, social and environmental losses, according to the Association of Southeast Asian Nations (ASEAN), a 10-member regional grouping that includes Indonesia, Malaysia and Singapore.

ASEAN members signed an agreement on transboundary haze pollution in June 2002 but Indonesia has yet to ratify the agreement.

(Reporting by Kevin Lim; Editing by Nick Macfie)