Although the US Congress agreed in December to let talks on the energy deal move forward, Indian and US officials are still at odds over the fine print of an accord seen as the centrepiece of a new post-Cold War relationship.

There was some cause for optimism after talks in Washington earlier this week, with Indian diplomats saying problem issues like the treatment of spent fuel and India's right to test nuclear weapons could be overcome.

But in the aftermath of the talks on how India should get previously forbidden nuclear technology, seven US senators wrote to Prime Minister Manmohan Singh telling him not to cosy up too much with Iran.

Washington is trying to isolate Tehran over its disputed nuclear programme and alleged support for terrorism.

"We are deeply concerned by India's increasing co-operation with that country," said the letter, which was widely published in the Indian media.

The senators -- who still have a say over whether the nuclear accord can go through -- objected to "the exchange of visits between high-level officials, enhanced military ties, and negotiations of agreements to establish closer economic relations." The text also singled out India's hopes to buy Iranian gas via a multi-billion dollar pipeline -- a project which, like the nuclear energy deal with the US, is seen as crucial for energy-hungry India to fuel long-term economic growth.