America will sanction export of sensitive military hardware if India responds positively to its request to contribute troops for peacekeeping in Iraq, a leading British daily reported on Wednesday.

"Reports from the US suggest a deal between India and the US that would see America sanction exports of sensitive
military hardware," The Guardian said.

The daily, which interviewed Deputy Prime Minister Lal Kishenchand Advani on Tuesday, quoted him saying that the deployment of troops in Iraq was still an open issue.

Advani is quoted in the interview as saying that India has offered open-ended talks with Pakistan on Jammu and Kashmir if the 'proxy terrorist war' against India is stopped.

"If the killing of innocents stops...we will find a solution for everything once we start talking," Advani said.

On the Kashmir issue, he spoke of possible compromises by both India and Pakistan. "After all, if you disagree so sharply on an issue as India and Pakistan disagree on the question of Jammu and Kashmir and if a settlement has to come about then it can only be in the form of some compromise in which both sides have to give and take in relation to their present positions," he told the daily.