The United States and India have reached an operating agreement on peaceful nuclear cooperation, Secretary of State Condoleezza Rice announced Friday.

"The United States and India have reached a historic milestone in their strategic partnership by completing negotiations on the bilateral agreement for peaceful nuclear cooperation," she said in a statement jointly issued with Indian Foreign Minister Shri Pranab Mukherjee.

"The conclusion of negotiations on this agreement marks a major step forward in fulfilling the promise of full civil nuclear cooperation as envisioned by President (George W.) Bush and Prime Minister Manmohan Singh," said the statement.

The civil nuclear cooperation will offer enormous strategic and economic benefits to both countries, including enhanced energy security, a more environmentally friendly energy source, greater economic opportunities, and more robust nonproliferation efforts, the statement said.

Rice did not provide details of the long-delayed, controversial accord, which, according to local reports, has gone beyond the terms approved by the U.S. Congress.

The Washington Times reported Thursday that the U.S. has agreed to help India secure fuel for its reactors, even if it conducts another atomic test.

The Bush administration made the major concession in closed-door talks with visiting Indian officials last week to save the civilian nuclear-energy deal with India, the newspaper quoted diplomats and nonproliferation experts as saying.

Sources familiar with the new proposal said the United States had offered to "consider the circumstances" before cutting off cooperation in the event of a nuclear test by India. In fact, Washington has even offered to help New Delhi secure alternative supplies of nuclear fuel as a way of getting round a U.S. embargo.

The sources said deal had been negotiated under pressure from India, which was determined to avoid having its hands tied in its nuclear rivalry with neighboring Pakistan.

One source with knowledge of the proposal said, "The United States would join India in seeking a fuel-supply agreement with the IAEA (International Atomic Energy Agency)."

"If there were an interruption, the U.S. and India will convene a group of friendly supplier countries, such as Britain and Russia, to restore the supply," the unidentified source said.

Christopher Griffin, a research fellow at the American Enterprise Institute, said the Bush administration's concessions are not a "real surprise, because its interest is not as much in nonproliferation as in removing the barrier to strategic cooperation with India on a broader agenda."

The U.S. and India reached a historic agreement on civil nuclear cooperation in March 2006, giving India access to U.S. civil nuclear technology, and opening its nuclear facilities to inspection.

U.S. President George W. Bush in December 2006 signed into law a bill approved by Congress allowing the deal to go through, a major step toward letting India buy U.S. nuclear reactors and fuel for the first time in 30 years.

But U.S. Congress attached several conditions to the law which were unpopular in New Delhi, and the two countries had to return to negotiations.

Under the bill, the U.S. president would be required to end the export of nuclear materials if India tests another nuclear device. India last performed nuclear tests in 1998.

The bill also does not guarantee uninterrupted fuel supplies for reactors and prevents India from reprocessing spent atomic fuel.

Indian critics have said the agreement would put restrictions on the country's nuclear weapons program.