Australia, which has almost half the world's uranium but no nuclear industry, is talking with China over uranium sales. Such sales are banned in Australia.

"We do not object to that," Bodman told reporters.

"It is something we would encourage both the Australians and the Chinese, that there are adequate safeguards in place in respect to the potential proliferation."

The United States, Japan, China, India, Australia and South Korea, and some of the world's leading heavy industry and power firms, started two days of talks on Wednesday.

It is the first meeting of the Asia-Pacific Partnership for Clean Development and Climate and the six nations account for 48 percent of greenhouse gas emissions, blamed for global warming.

By comparison, developed nations bound by emissions caps under the Kyoto Protocol account for 35 percent greenhouse gases.

The talks will focus on tackling air pollution, mainly by more efficient use of coal and oil.

Bodman said nuclear power must play a bigger role in global energy to fight pollution but voiced concern over the possibility uranium could be obtained by terror groups.

The government of Australian Prime Minister John Howard is pushing for more states to allow uranium mining - three of eight states and territories ban the practice - as global demand rises because of high oil prices and a drive to cut greenhouse gas emissions caused by burning fossil fuels.

A pact allowing sales to China could be in place by the end of 2006, Foreign Minister Alexander Downer told Reuters.

"Obviously, nuclear power is greenhouse friendly and that needs to be taken into account," Downer earlier told reporters.

China is expected to build 40 to 50 nuclear power plants over the next two decades.

In anticipation of wider sales of uranium, prospectors are scouring the outback. More than two dozen companies have listed on the local stock exchange over the past year or so promising uranium finds.

World uranium prices have more than tripled to more than $30 a pound (0.45 kg) since 2004 as a one-time mountain of reserves runs out.

Geologists estimate Australia holds 41 percent of the world's uranium and it relies on exports to 36 countries holding bilateral safeguard agreements for revenue from the material.

Uranium demand waned in the 1980s as cheap oil compounded a public perception that nuclear power was unsafe. Uranium prices sank as low as $10 a pound.

There are 441 commercial nuclear power plants worldwide and a further 30 under construction, mainly in Asia. Australia has three uranium mines, owned by BHP Billiton Ltd./Plc, Rio Tinto Ltd./Plc and General Atomics of the United States.

(US$1 = A$1.33)