Divers Wednesday recovered the bodies of two seamen who went missing after their dredger collided with a tanker off Singapore and rescuers were hunting for three still missing.

The accident around the busy Singapore Strait occurred just weeks after a deadly collision involving a US warship in the same area.

After the latest collision in the early hours, the Dominican-registered dredger capsized, leaving four Chinese members of crew and one Malaysian missing. Seven other sailors were rescued.

A major rescue effort was launched involving almost 30 boats from Singapore and neighbouring Indonesia, and five Singapore Air Force aircraft.

Singapore's Maritime and Port Authority, which is leading the rescue effort, said in a statement that "divers have recovered two bodies out of the five missing crew", and the search for those still missing was continuing.

They did not disclose the nationalities of the dead.

The Indonesian-registered tanker sustained damage to its front section but is stable and none of its crew members were hurt, the port authority said.

There were no reports of disruption to shipping in the Singapore Strait or an oil spill.

On August 21 the destroyer USS John S. McCain collided with a tanker near the Singapore Strait, tearing a gaping hole in the warship's hull and flooding it.

Ten US sailors were found dead inside flooded compartments after the collision, the latest accident involving an American warship in Asian waters.

The waters around Singapore are some of the busiest in the world, with huge numbers of cargo vessels plying trade routes between Asia and Europe.