We report on the development of a new high efficiency detector for small animal PET. The detector is based on a monolithic block of LSO pixelated using laser ablation technique. The laser processing allows pixelation with very narrow, 70 mum wide, inter-pixel gaps resulting in a substantially enhanced sensitivity when the detectors are operated in coincidence mode. This paper presents the first results of a detector module fabricated using this approach. Preliminary imaging data at 511 keV obtained by coupling the pixelated LSO to a position sensitive photomultiplier tube (PSPMT) and a position sensitive avalanche photodiode (PSAPD) are presented.