Officials of India and the United States, who are discussing the civilian nuclear deal in New Delhi, have narrowed down the differences.

With both sides aiming to conclude the bilateral agreement, called 123 Agreement, by the end of this year, officials of the two countries held daylong talks to iron out differences over various elements, including fuel supply assurances, reprocessing of spent fuel and future nuclear testing by India.

The two sides understood each other's position and there was some narrowing down of differences, sources said, without elaborating.

New Delhi has alleged that the Henry Hyde Act, passed by the US Congress in December, to allow civil nuclear trade with India, significantly deviates from the understanding of July 18, 2005, (when Prime Minister Manmohan Singh visited Washington) and March 2006, (when President George W Bush visited New Delhi) which was unacceptable to it.

New Delhi has already conveyed its concerns to Washington and handed over a draft text of the agreement suggesting the clauses it wants incorporated.

At the two-day talks, the Indian side is led by Joint Secretary in External Affairs Ministry Gayatri Kumar while the American delegation is headed by Richard Stratford, director of Nuclear Division in the State Department.

Officials of the Department of Atomic Energy and S Jayshankar, Indian ambassador to Singapore, are also participating in the talks. Jayshankar was Kumar's predecessor and had been involved in the parleys earlier.