"Wherever they have strengths, we want to jointly develop the missiles so that both countries can benefit and share designs, costs and risks," V.K. Atre told reporters in Hyderabad, the hub of India's missile-building facilities.

Atre did not elaborate about the system which India hopes to build jointly with Israel. He said talks are being held between India's Defence Research and Development Organisation and its state-owned Israeli counterpart.

Atre denied that Israel was already helping India to build guided missiles and said defence cooperation was confined to research and the development of sensors and fibre-optic gyroscopes for the military.

India, which treated Israel like a pariah for decades, hass in recent years forged close military links. It is acquiring two Phalcon Airborne Early Warning Systems from the Jewish state at a cost of a billion dollars.

On Sunday India successfully tested its medium-range Agni-II (Fire) missile, which has a maximum range of 2,500 kilometres (1,560 miles) and can carry a one-tonne nuclear warhead.

India is also planning to test its Agni-III missile which has a range exceeding 3,000 kilometres but has not announced a date, reportedly due to pressure from the United States to delay the test.

The Indian army has already armed itself with Agni-I missiles, which have a range of 700 kilometres.

India and Pakistan held nuclear tests within two weeks of each other in 1998. Since then they twice came close to war in their dispute over Kashmir but relations beeen recently been improving.

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