U.S. Undersecretary of State Nicholas Burns has completed talks in New Delhi on a ground-breaking deal for the United States to supply India with peacetime nuclear fuel. VOA's Steve Herman reports from New Delhi that while progress is reported, negotiators say no deal has been accomplished - yet.

American and Indian officials meeting here were hoping to conclude a landmark civilian nuclear agreement before leaders from both countries meet next week at the G-8 summit in Germany.

Officials from both countries say that while progress has been made, the deal - known as the 1-2-3 agreement - is not yet complete.

US Undersecretary of State Nicholas Burns, right, and Indian Foreign Secretary Shiv Shankar Menon arrive for delegation level talks, in New Delhi, India, 01 June 2007

U.S. Undersecretary of State Nicholas Burns had numerous discussions with Indian Foreign Secretary Shivshankar Menon and also met with Prime Minister Manmohan Singh before the two sides gave up Saturday trying to reach an immediate agreement.

Menon, speaking to reporters, says India wants to conclude an agreement as quickly as possible.

"We will discuss this again," he said. "We both need a little time to think over what we have done over the last few days and then we will re-engage."

It was expected that Burns would appear jointly with Menon to brief reporters, but the Americans did not participate in the news conference. The U.S. Embassy issued a statement, read by spokesman David Kennedy, calling the three days of talks "productive."

"We look forward to a final agreement as it is indisputably in the interests of both governments," he said.

In July 2005, leaders of the two countries announced an overall deal for cooperation in the civil nuclear field. But since then, diplomats from Washington and New Delhi, during four rounds of formal talks and countless informal discussions, have been unable to resolve key differences to ready the pact for presentation to legislative bodies in their respective countries.

Opposition politicians here contend that any deal with the United States must not impinge on India's sovereignty. They say the deal in its present form would forbid India from conducting future nuclear weapons tests while placing no such restrictions on the United States.

The United States wants India to have separate civilian and military nuclear facilities and allow its nuclear programs to be scrutinized by international inspectors, even though India is not a party to the nuclear Non-Proliferation Treaty.

In return, the United States would provide fuel for the country's nuclear power plants and give it access to vital atomic technology, which India seeks amid a huge power shortage.

India's Foreign Secretary Menon says it is vital for his country to increase nuclear power production which, at present, only totals about three percent of the country's electricity.

"We will thereby make a major contribution to our own energy security to providing the energy that India needs for her own development in a clean and environmentally friendly manner," he said.

The major sticking point revolves around Section 1-2-3 of the U.S. Atomic Energy Act which declares that in case of agreements with nuclear weapons states the United States can demand the return of any supplied nuclear materials and equipment if the recipient nation detonates a nuclear device.

American officials say the pending agreement will not be able to over-ride that clause. In addition to gaining an exception from Section 1-2-3, India wants to retain the right to reprocess uranium.

The agreement would end three decades of U.S. sanctions against India in the nuclear arena and be a major symbol of the rapidly increasing ties between the United States and India, which was a close ally of the Soviet Union during the Cold War.