DATE=3/21/2000 TYPE=CORRESPONDENT REPORT TITLE=CLINTON-INDIA TALKS (L) NUMBER=2-260405 BYLINE=DAVID GOLLUST DATELINE=NEW DELHI CONTENT= VOICED AT: INTRO: President Clinton and Indian Prime Minister Atal Bihari Vajpayee have held talks in New Delhi, in a meeting overshadowed to some extent by an attack on Sikh villagers in Indian Kashmir hours earlier. More than 30 people died there. The meeting followed an official welcome for Mr. Clinton, who is making the first visit to India by a U-S president in 22 years. V-O-A's David Gollust reports from the Indian capital. TEXT: Both leaders condemn the Kashmir killings -- attributed to Muslim militants -- in strong terms, with Mr. Vajpayee calling the village attack a "premeditated act of barbarism" and a further example of "ethnic cleansing" he says has been underway in the region for a decade. Without specifically blaming Pakistan for the incident, the Indian leader says he rejects the notion that "jihad" -- or holy war -- can be a part of any country's foreign policy and says India has "the means and the will" to eliminate the menace. But, under questioning, he also said India is prepared to solve all problems with Pakistan peacefully and suggested concerns expressed by some analysts that another war in South Asia might be imminent are over- wrought: ///VAJPAYEE ACTUALITY/// The situation I not so bad as it has been made out to be. There are differences. There have been clashes. There is the problem of cross-country terrorism. Innocent people are being killed. But there is no threat of any war. ///END ACTUALITY/// President Clinton -- who postponed a trip to the region two years ago because of the nuclear tests by both South Asian powers -- says he urged Mr. Vajpayee to roll back the regional arms race by, among other things, signing the Comprehensive Test Ban Treaty. He says he came away from the talks optimistic about making progress. Mr. Clinton also says he had urged restraint over Kashmir and will make the same appeal when he meets Pakistani military leader General Pervez Musharraf in Islamabad Saturday: ///CLINTON ACTUALITY/// I can tell you that this is my same message: respect the line of control, show restraint, stand against violence, restore the dialogue. ///END ACTUALITY/// Mr. Clinton and Prime Minister Vajpayee signed what is called a "vision statement" for improving a bilateral relationship that Mr. Clinton says the United States had neglected in the past. The Indian prime minister accepted an invitation to visit Washington later this year as part of what are to be regularized top-level meetings between the two countries. (Signed) NEB/DAG/WD 21-Mar-2000 04:45 AM EDT (21-Mar-2000 0945 UTC) NNNN Source: Voice of America .