``In case of no consensus, the matter may have to be resolved by the White House, which is currently leaning towards China on almost all issues to ensure a successful visit by president Bill Clinton to Beijing in June,'' it said.

Assistant defence secretary for strategy Edward Warner raised his objections on April 17 to the proposed sale.

This marks the second time the Pentagon has wrangled with the commerce department over a dual-use licence request by Consarc Corp, a New Jersey firm seeking to sell a 500 kg vacuum-induction melting furnace to China's state-ownedShenyang Institute of Metals Research, the magazine said.

Mid-level officials at the commerce department's bureau of export administration recommended approval of the Consarc licence request at an inter-agency operating committee meeting on April 16.

A day later, after strong national security objections from Pentagon's defence technology security administration, Warner filed his objections.Consarc was denied an export licence last July after Pentagon insisted that the furnace could be used to assist in the development and production of weapons of mass destruction.Pentagon officials also argued at the time that the Shenyang Institute, based in Shenyang, China, is involved in China's nuclear weapon and rocket delivery programme and is, therefore, banned from receipt of US technology under existing US sanctions laws.This time, however, Consarc has the support of the World Bank, which has agreed to fund Chinese efforts in rare metals research, which Consarc president William Marino said would be aided by thefurnace sale, the weekly said.

A Pentagon official who asked not to be named told the weekly, ``there is no way to verify whether this technology will be put to civilian or military use. The Chinese already have told us they won't allow post-shipment inspections, so we have to assume the worst-case scenario.''

All major countries, including India, China and Russia, have rejected US demands for post-shipment inspections and verifications as an unwarranted assault on their sovereignty.

The only exception India has made is with regard to any nuclear power plant established with outside help. About the World Bank's involvement, the Pentagon official said, ``we are not going to automatically roll over and play dead because an international body gets involved.''

``In fact, in some instances, some countries have used international agencies as potential end-runs around national controlled systems,'' the official said.

Vergara, manager of the World Bank's 200 million dollar China technology project, whichfunds 47 technology firms in China for civilian development projects, told `Defense News,' ``this particular contract with Consarc has given us a lot of headaches and has taught us a lesson that we need to stay away from controversial cases.''

He appeared to justify the sale by saying the World Bank project does not provide funding for military purposes and that the Consarc sale, valued at a little more than one million dollars, is a minute part of the overall project.

As a result of the sensitivities regarding the Consarc case, Vergara said, the World Bank will agree to a request by the Shenyang Institute to drop the proposed US contract and go with a European supplier. He declined, however, to name the European supplier. (PTI) Commerce department officials granted Consarc a similar licence in June 1989 to sell 10 million dollars worth of furnaces to Iraq but the licence was cancelled less than a month before Baghdad's invasion of Kuwait because of last minute intervention by Pentagon and nationalsecurity council officials.