"There were several issues still open when we started talks," Foreign Secretary Shivshankar Menon told reporters after three days of "intense" and "productive talks" with US chief negotiator Nicholas Burns.

"We have come much closer in our understanding of the issues that divide us. We have managed to remove most of the issues from the table," Menon said.

India and the United States are negotiating the fine print of a landmark atomic energy accord and the officials said a visit by Secretary of State Condoleezza Rice to New Delhi was also being worked out.

The accord is intended to reverse three decades of US sanctions on nuclear trade with India, even though New Delhi has not signed the nuclear Non-Proliferation Treaty and tested nuclear weapons in 1998.

Under the deal India is to separate nuclear facilities for civilian and military use and set up a regime of international inspections in return for technology and nuclear fuel supplies.

But differences remain over New Delhi's demand for assurances that Washington would continue to supply fuel for its nuclear plants in the event of New Delhi conducting further nuclear weapons tests.

India also wants no curbs on the reprocessing of spent nuclear fuel.

On Saturday, Menon confirmed that this was "one of the issues we are still discussing."

"We are optimistic that we will make the deal," he added.

Menon said Indian Prime Minister Manmohan Singh would follow up next week with US President George W Bush during a bilateral meeting on the sidelines of the meeting of the G8 group of industrialised nations in Germany.

Secretary Rice would then visit New Delhi, Menon said. "The dates are towards the end of July, early August," he added.

Menon's optimism on bridging differences was shared by Indian Foreign Minister Pranab Mukherjee, the Press Trust of India news agency reported.

"There is no question of a deadlock," Mukherjee said. "Things will come through."

However, a statement from the US embassy in New Delhi said "more work remains to be done to complete arrangements that will permit a civil nuclear agreement to be finalised between the US and India.

"We look forward to a final agreement as it is indisputably in the interest of both governments."

Despite reporting "considerable progress," Menon admitted dates and a venue for the next meeting between the two sides had not been set.

In Delhi, Burns called on premier Singh, Mukherjee and National Security Advisor M.K. Narayanan and exchanged views with senior opposition Hindu nationalist Bharatiya Janata Party leaders Jaswant Singh and Brajesh Mishra.