Under the deal China will build a second plant at Chashma, some 270 kilometers (167 miles) south of Islamabad, capable of producing 300-megawatts of electricity.

The agreement was signed by China National Nuclear Corporation president Kang Rixin and Pakistan Atomic Energy Commission chairman Pervez Butt, an official statement said.

Prime Minister Zafarullah Jamali and Chinese Vice Minister for Science and Technology Zhang Huazhu also attended the ceremony.

The 600-million-dollar C-2 (Chashma-2) project is likely to be completed in six years. A similar capacity plant built in Chashma with Chinese help became operational in 1999.

"The plant is for civilian use," a Pakistan Atomic Energy Commission spokesman told AFP.

"Construction of C-2 will increase economic activity, employment opportunities for thousands of engineers and scientists," the statement said.

"It will help in the expansion of industrial capability, enhancement of energy security ... and reduced emission of atmospheric pollutants."

Commissioning of the second unit would give Pakistan "a high degree of self-reliance in nuclear power technology," it said.

The deal was signed a day after the car bomb in southwest coastal town of Gwadar killed three Chinese engineers helping to build a multi-million dollar seaport. Nine Chinese workers and a Pakistani driver and a police guard were injured when their van passed by an explosive-laden car triggered by remote control on Monday.

Islamabad strongly condemned the attack and vowed it would never allow "a few terrorists" to undermine Pakistan-China friendship and cooperation.

Police have arrested 13 people following the blast which officials suspect was carried out by hardline groups from surrounding Baluchistan province angry that local people had been passed over for jobs in the 248-million dollar port project.

Chinese consul general Sun Ghun Ye said despite the attack none of the 400 Chinese workers and engineers would abandon the project.

China, Pakistan's strongest and oldest ally, is financing some 200 million dollars of the Gwadar project.

Pakistan has relied heavily on China for its defence needs since 1990 when the United States stopped supplying it with military hardware over its nuclear programme.

Pakistan confirmed it had nuclear weapons in May 1998 when it matched tests conducted by India.

WAR.WIRE