The Indo-US high-level negotiations to seal the 123 Agreement in order to facilitate the civilian nuclear cooperation agreement is coming down to the wire, with more talks scheduled for Thursday after marathon discussions at the State Department and the White House on Wednesday failed to resolve the impasse over the reprocessing issue, notwithstanding New Delhi's offer of a dedicated facility under full-time safeguards.

On Wednesday, both teams, led by Under Secretary of State for Political Affairs Nicholas Burns and Indian Foreign Secretary Shiv Shankar Menon, met for several hours with even US Secretary of State Condoleezza Rice dropping in on the talks to give them her imprimatur of the administration's commitment to finalize the agreement and get on with the next phase of deal.

National Security Adviser M K Narayanan, who is leading the Indian delegation, then went over to the White House to meet with his counterpart Stephen Hadley for one-on-one talks and was then joined for a working luncheon by Menon and Burns, which was followed up by a post-lunch session that went on till late afternoon.

But, at the end of the day, belying expectations of a possible announcement that the 123 agreement had been wrapped up, both sides were still stuck on the reprocessing issue with the US, while impressed with India's proposal of a dedicated facility under full-time safeguards to reprocess American nuclear fuel supplies, unwilling to agree to India's insistence that it could not allow for international supervision.

Thus, it was decided to continue talks late Thursday morning between Menon after he finishes with his morning meeting with Deputy Secretary of Commerce David Sampson to attempt once again to try and hammer out a meeting of minds on this contentious issue which remains the single remaining issue to be resolved in what is being described as "make or break" negotiations.

While the Indian team had hoped its proposal of a dedicated facility under full-time safeguards will be the clincher to finally complete the 123 Agreement, since it believed it was addressing particularly Congressional concerns regarding diversion of reprocessed US nuclear fuel to a military facility to assist in expanding India's nuclear arsenal, the US side, while acknowledging the merits of the proposal, had argued for permission for international supervision.

The Indian side simply couldn't agree to this because the chairman of the Atomic Energy Commission Anil Kakodkar will have shot down such a concession in a heartbeat because of the Indian scientific establishment zealous protection of its turf and complete opposition to any international monitoring of India's nuclear facilities.

On the eve of the negotiations, Ashley Tellis, senior associate with the Carnegie Endowment for International Peace and an adviser to Burns, who is involved in the talks, told rediff.com in an exclusive interview that it would be interesting "to see what Narayanan and Menon, bring in terms of specifics," on the dedicated facility proposal, and predicted that "it could be an enormously help way forward �in addressing Congress' concerns."

But administration sources told rediff.com that while the proposal necessarily addresses Congress' concerns, India's insistence that no way would it allow for international supervision wouldn't fly with Congress, and that this is why the US side was pressing New Delhi to show some flexibility to permit monitors beside their own so that the 123 could be wrapped up.

But diplomatic sources reiterated their argument that this would not fly with the likes of Kakodkar and the nuclear establishment in India and would be tantamount to lending credence to those opposed to the nuclear deal who would declare that India had 'surrendered' to the US on the reprocessing issue that was not part of the July 2005 Joint Statement and March 2006 separation plan.

Tellis explained in the interview that in the March 2 separation plan, "India offered to put one reprocessing facility under safeguards, but only in campaign mode," which means that when safeguarded fuel is introduced into the facility, safeguards will kick in, but when the safeguarded fuel is completely process, the facility comes out of safeguards.

"So it's an on/off kind of arrangement," he said, and noted that "many people in Congress have concerns about whether this kind of arrangement is satisfactory from the point of view of preventing diversion."

Thus, he said "from the point of view of preventing diversion," India's proposal of a dedicated facility under full-time safeguards was "a very important way forward," and could "assuage not only the US but the entire international community that whatever cooperation takes place with India and involves the use of a reprocessing facility, this facility will be under the certainty of a safeguards regime 24 hours a day, 365 days a year."

So, as one administration source told rediff.com after both sides had adjourned on Wednesday, "it's a case of so near but yet so far, because no way in Congress going to go for anything short of some kind of international supervision whether by the IAEA or a team of monitors from the NSG (Nuclear Suppliers Group) or something similar."

Ironically, President George Bush [Images] during his joint news conference with Prime Minister Manmohan Singh [Images] in New Delhi's Hyderabad House on March 2, 2006, acknowledged that he had condoned reprocessing rights for India.

Bush declared publicly at the time that "I proposed reprocessing agreements -- that stands in stark contrast to current nuclear theology that we should not reprocess for proliferation concerns," when questioned as to why as the nonproliferation lobby had argued, India was being rewarded for what was perceived as its intransigence in not signing the Nuclear Nonproliferation Treaty.

The President argued that "I don't see how you can advocate nuclear power, in order to take the pressure off of our own economy, for example, without advocating technological development of reprocessing, because reprocessing will not only put it bluntly, there will be less material to dispose."

He did not mention anything about international supervision then in arguing for the merits of reprocessing, but apparently no one was listening.