``We have pressed both the governments (of India and Pakistan) to initiate talks and address serious differences on Kashmir. The only way this issue can be resolved is by holding discussions at the highest levels. The recent meetings in Durban and the United Nations have given cause for some hope,'' Celeste told reporters after he arrived in the city to inaugurate a new US and Foreign Commercial Service Office.

To a query on why the US had a distinct policy for China and Pakistan as against India, Celeste said that since the US enjoyed friendly relations with these countries, it was in a position to `exert influence'. ``But whenever we believe that China has not observed terms of exportcontrol, we have expressed our views forcefully to the (Chinese) government.''

He cited the example of Pakistan where the US had expressed profound concern over the activities of one terrorist organisation. ``You cannot say that we are inattentive to these matters,'' he argued, adding that terrorism was a global issue which required to be addressed. ``We desire to work in cooperation with India to eliminate terrorism.''

Celeste indicated that his government did not wish to use sanctions as an attempt to harm or punish India but wanted to send a message across the globe to express concern about nuclear proliferation.

To another query on how he could justify the US action, especially since his was the only country to have actually used the bomb in Hiroshima and Nagasaki, Celeste said, ``Of course, we have every right to speak on this subject since we know the dangers and responsibilities of nuclear capability.''

The US ambassador believed that maintaining any kind of nuclear capability safely was anexpensive proposition. ``We have worked diligently to reduce the spread and contain the threat of nuclear weapons across the world.'' He claimed that the untold story was that the US was reducing its nuclear weapons. He cited Start I and II treaties with the erstwhile Soviet Union to support his argument.

``A decision was taken some years ago to undertake a reduction in the nuclear warheads. We have already reduced the warheads from 20,000 to 10,000,'' he said, adding that the US was literally destroying a nuclear weapon everyday.

While he agreed that the opening of the US and Foreign Commercial Service Office in Pune was a `paradox' in light of the sanctions, he reiterated that the intention of the US was to build a strong, healthy and robust relationship with India.

``We wish to encourage healthy business and form economic partnerships between the two countries,'' he said, adding that another office would soon be opened in Hyderabad. ``Even while the sanctions are in place, we seek to do business withIndia.''

The newly opened Pune office, he said, would work towards increasing IT-related activities, electronics, software and telecom. There had been investments in the Iridium project and Birla AT & T. The focus would also be on agriculture related business and automotive part suppliers. The Pune office is the seventh of the Foreign Commercial Services (FCS), making India the country with the largest FCS presence.