Israel's defence ministry director general Amos Yaron kicked off the talks with a string of meetings with his Indian counterpart Ajay Prasad, naval chief Madhavendra Singh and army chief N.C. Vij on the sidelines of a curtailed visit to New Delhi by Prime Minister Ariel Sharon.

Visiting Israeli Deputy Prime Minister Joseph Lapid said, meanwhile, Tel Aviv would sell three Phalcon airborne early warning systems to India -- a billion-dollar deal for which the United States gave the go-ahead only last month.

"There is no obstacle in the sale of Phalcon as the US has given its approval," Lapid said, adding that a time-frame for the deal was yet to be finalised.

Pakistan, India's nuclear rival, warned the military cooperation between Tel Aviv and New Delhi could lead to explosive consequences.

"By visits of that nature in which the primary purpose seems to be the sale of ultra-modern and strategic weaponry aimed at disturbing the balance of power in South Asia, ultimately it will be the poor people of South Asia who will pay," Pakistan Foreign Minister Khurshid Mahmud Kasuri said during a visit to Bangladesh.

Kasuri said Islamabad would not "compete with India in the form of a military race, but we will do all that it takes to maintain a minimum credible deterrent."

Indian defence sources said the talks in New Delhi focussed on the purchase of surveillance equipment and assault rifles India needs to raise "lethal platoons" in each of its infantry battalions.

India a week ago set aside 65 million dollars for the formation of "lethal platoons" to counter militancy, especially in the insurgency wracked zone of Kashmir.

At the same time it has stepped up efforts to buy hardware to monitor cross-border infiltration from adjoining Pakistan.

The officials said the defence talks touched on India's growing concerns about the inflow of Islamic militants from Pakistan-administered Kashmir which has sparked increased bloodletting in the disputed Himalayan territory.

"India is also looking at joint production of unmanned aerial vehicles, night vision devices for its battle tanks and unobtrusive surveillance technology from Israel for border management," a top source told AFP.

"We are also keen to acquire 10 Barak missiles for the navy and a number of Arrow missiles from Israel which will form the cornerstone of India's air defence and give a lethal edge to our capabilities," he said, citing the agenda of the talks.

Israel's deputy premier Lapid said Washington was yet to give its green light for the sale of the Arrow, jointly produced by Israel and the United States, to India.

Indian sources said since New Delhi had already bought Israeli Green Pine radar, which tracks incoming ballistic missiles and locks the Arrow onto the target, there were no reason for the United States to block the deal any longer.

The Indian military, with an annual defence budget of around 14 billion dollars, is also seeking electronic warfare (EW) systems to arm seven of its frontline ships.

"Israel is already upgrading our MiG-21 aircraft and artillery systems and the talks on the EW and the electronic sensors for our borders have progressed well," the source said.

Indian Defence Minister George Fernandes was to call on Sharon, who has cut short his original four-day trip due to suicide attacks in Tel Aviv, before the Jewish leader flies back home later Wednesday.

Indian military sources stressed the talks would send a "strong signal to the Arab world" of an emerging strategic triangle between the United States, Israel and India.

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