The bilateral ties between India and US are also in for a "difficult patch", though the doors are open for a high-level dialogue, the US ambassador to India, Richard F Celeste, said in a wide-ranging interview to PTI.

Celeste said if one looked at the actions of the financial institutional investors, there was a fair amount of "backing away" from investment decisions in India not mainly because of sanctions, but due to long term implications.

The tests had also created an impression that whether India was the best place to invest, he added. Maintaining that many of the US sanctions were already in place such as exim credits and OPIC insurance, he said the US treasury, state and commerce departments were working out ways of enforcing other measures like export control items, denial of licences and commercial bankingoperations.

He said the US sanctions would have adverse effect on major private sector projects in India to be either financed by banks or American companies to an estimated eight to ten billion dollars.

However, the ambassador said a distinction would be made for projects already cleared and in the pipeline and and those meant for humanitarian purposes. Asked whether US business interests would take precedence over government sanctions, Celeste said it was acknowledged that India offered a huge market but things appeared to be different on the ground.

"Look at the fast track power projects. In the last six months, not not one of them has been cleared. Only Enron one has got the nod. Many of these projects have been limping along. So it is a complicated message as to how determined the government is on welcoming and facilitating investments here", Celeste said.

About the Indian ministers' optimism that sanctions would not have any immediate impact, he said the measures by US and some other countrieslike Japan would have an effect through decisions on lending agencies like IMF and ADB involving several billion dollars.

Asked about tightening of screws on India by US and other countries, he said this would not not have come as a surprise to new Delhi which would have considered all the implications before going ahead with the tests.

US president Bill Clinton's visit to India in November this year is "under review" even as Washington on Monday indicated that its sanctions to the tune of several billion dollars against New Delhi will be "real and serious".

On Kashmir, Washington's policy was very clear that it should be resolved through "direct and constructive" talks between India and Pakistan, he said.

"We believe sooner the talks get underway, it will be better for both the countries and for the stability in the sub-continent", he said in response to questions which covered nuclear tests by India and Pakistan and subsequent US sanctions as well as bilateral ties.

Asked why the US and keycountries were focussing on Kashmir and linking it with the Pokhran tests, Celeste said this was due to the BJP talking about India exercising the nuclear option in its manifesto which also referred to Kashmir.

The ambassador, who was called to Washington after the May 11 Pokhran tests while he was in Hawaii, talked about the impressions created by the Indian nuclear tests.

"After the nuclear tests by India, home minister L K Advani seemed to link the country's nuclear weapons capability with the issue of Kashmir which was followed by prime minister Atal Bihari Vajpayee travelling to the test site in the company of Jammu and Kashmir chief minister Farooq Abdullah," Celeste said while noting the impact of these images broadcast throughout the world.

These factors "powerfully link" Kashmir and nuclear tests, he said observing it should come as no surprise to India that leaders in US and elsewhere must be very concerned about Kashmir.

Asked whether the nuclear tests had put President Clinton's visit toIndia under a cloud, he said "well, just now now it is under review".

"President Clinton has certainly expressed his desire to come to India at an appropriate time," he said, adding the US president was giving a great deal of personal time and efforts to securing successful negotiations on the Comprehensive Test Ban Treaty (CTBT) which is now now awaiting ratification in the US. "I think he has to weigh that as he thinks about the possibility of the trip," he said. Celeste said there was a great deal of ``disappointment and concern'' in Washington about the tests which had several dimensions on global efforts to reduce and eliminate nuclear weapons and that they increased tension, danger and insecurity in South Asia.

"These are the two over-riding concerns driving the policy of not not only the US government but many other governments who share these concerns," he said. On Indo-US ties, he said, "if we are realistic, I believe, we are in for a difficult patch. There is a great deal of talk about sanctionsand also speculation here. The sanctions, he said, would be "real and serious".