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Critics say nuclear cooperation with India could spur the spread of nuclear weapons and sends the wrong message to countries like Iran as they pursue their own atomic programs. India built its bombs outside the Nuclear Non-Proliferation Treaty, which provides civil nuclear trade in exchange for a pledge from nations not to pursue nuclear weapons.

While taking a major step forward, the deal still must be approved by international regulatory bodies and then face review by the US Congress. Friday's announcement came after months of often frustrating technical talks on a broad deal that was struck two years ago.

The text of the document was not released, but negotiators said they had settled the thorniest issue: American reluctance to allow India to reprocess spent atomic fuel - a key step in making atomic weapons.

Nicholas Burns, the chief US diplomat at the talks, said the US agreed to an Indian offer to build a reprocessing facility safeguarded by UN inspectors that would prevent fuel from being used to build nuclear bombs.

Indian Foreign Secretary Shiv Shankar Menon, when asked whether the deal would allow India to divert supplies to its weapons program, said: "We are not using it as an excuse to enhance our strategic capabilities. The earlier these countries forget that, the better it is."

Opponents say the extra fuel the measure provides could boost India's nuclear bomb stockpile by freeing up its domestic uranium for weapons. That, they say, could spark a nuclear arms race in Asia.

But Burns said the deal will "liberate our two countries for a new engagement" after 30 years of tense relations over nuclear matters. It will also, he said, likely lead to increased defense cooperation and sales of US military technology.

President George W. Bush hailed the deal as "another step in the continued progress that is deepening our strategic partnership with India, a vital world leader."

The Indian side was clearly pleased with the deal. National Security Adviser M.K. Narayanan said India has "settled for what we think is more than adequate."

Narayanan told reporters that the text did not address India's demand to be allowed to continue to carry out nuclear tests.

"This deal deals primarily with civil nuclear cooperation. There is no reference here to the event of a test. If there is a test, we will come to that later on," he said.

Burns said the US would ask for all its fuel and technology to be returned should India test a nuclear weapon.

For nuclear trade to happen, India must make a separate agreement with the UN nuclear watchdog -- the International Atomic Energy Agency -- and with the Nuclear Suppliers Group, an assembly of nations that export nuclear material.

Burns said both countries hoped that could happen by the end of the year.

The deal allows the United States to ship nuclear fuel and technology to India, which in exchange would open its civilian nuclear reactors to international inspectors. India's military reactors would remain off-limits.

A spokeswoman for the foreign ministry of Pakistan, India's nuclear-armed rival, referred to remarks made at a news conference earlier this week in which she said that Pakistan was concerned that the deal "would help bolster India's nuclear weapons capability."

"We will continue to watch the situation closely," Tasnim Aslam said. "We believe that access to civilian nuclear technology should be nondiscriminatory."