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The meeting was being held on the eve of Indian Prime Minister Atal Behari Vajpayee's departure on a three-nation tour of Russia, Germany and France.
The Hindustan Times newspaper said Monday the cabinet meeting was significant because Vajpayee was expected to hold talks with US President George W. Bush in France on the sidelines of a summit of Group of Eightindustrialised nations.
The G8 political leaders, from Britain, Canada, Germany, France, Italy, Japan, Russia and the United States, are meeting in the French alpine resort of Evian on the Swiss border for their annual summit from June 1.
A proposal for India to send troops to Iraq was discussed during a visit by US Deputy Secretary of State Richard Armitage to India on May 10.
The Hindustan Times said India may decide not to accede to the request because its forces would be under the command of US and British forces.
New Delhi has constantly argued that all operations in Iraq should be under the auspices of the United Nations and the not the US-led coalition.
The Indian parliament last month passed a resolution calling for the immediate withdrawal of US-led forces from Iraq.
The resolution had also described the actions of the US-led military operations in Iraq as unacceptable.
An editorial in the Times of India newspaper Monday described as "surprising... the reported choice of India for monitoring one out of the five administrative sectors into which Iraq has been divided.
"Clearly, the anti-war resolution that parliament passed in the closing stages of the war hasn't worked against India's interests. On the contrary, the US evidently sees a role for India in the management of Iraq," it said.
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