Speaking after talks with India's Prime Minister Manmohan Singh, Bush said the two leaders had discussed many issues including terrorism.

"India and America have built a strategic partnership based on common values," he told reporters.

"We are working as partners to make the world safer," Bush said, stressing bilateral cooperation in efforts to defeat terrorism.

"We are cooperating on the military front," he said, praising India's help in encouraging the development of democracy, notably in Afghanistan.

"We worked as partners responding to the tsunami," he said, referring to the tragedy that hit south Asia on December 26, 2004 killing tens of thousands.

He read a joint statement on behalf of both India and the United States criticising Myanmar's military junta and Nepal's warring Maoists and monarchy.

"Our discussions were more than just friendly handshakes," he said.

"We discussed important international relations. We are partners in peace. India and America have built a strategic partnership based on common values."

After announcing that a historic civilian nuclear deal had been struck between India and the United States, he said: "Our relationship is changing dramatically."

During the Cold War, New Delhi's diplomatic priorities lay with Moscow, rather than Washington, but the collapse of the Soviet Union, followed by reform and economic liberalisation, marked the start in the early 1990's of a shift towards to the United States.

Singh said the nuclear deal "makes me confident there is no limit to Indo-US partnership".

Bush arrived on his maiden visit to India on Wednesday night after a brief stopover in Afghanistan and was due to leave for Pakistan late Friday.

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