NEW DELHY, January 23 (IslamOnline) – The United States has offered Iraqi President Saddam Hussein an "escape route" exile to neutral India, an influential Indian newspaper disclosed Thursday, January 23, on its website.

Quoting "highly placed government sources" in Delhi, India's influential newspaper, Times of India (TOI), said the proposal of India as a "neutral" territory for Saddam has been passed to the Iraqi regime by the U.S. Central Intelligence Agency (CIA).

While no official response has been forthcoming from India, the London office of RAW, the Indian equivalent of the CIA, has been informed of the suggestion, the paper said.

"India is the only location Saddam can be exiled where he cannot be a potential threat unlike any other country," TOI quoted an official as saying.

U.S. Defense Secretary Donald Rumsfeld had recently suggested that Saddam should go into exile to avoid military action against Iraq, saying that it would be a "fair trade" to avoid military showdown.

While it is unlikely that Saddam will accept any U.S. proposal to go into exile, his government has reportedly been told that if he accepts exile, he will be allowed to retire into oblivion peacefully.

India, with a history of very cordial relations with Iraq, has been firmly opposing any unilateral military action against the country.

External Affairs Minister Yashwant Sinha has said that no country has the authority to change any regime anywhere, however mighty it was, while advocating a peaceful resolution to the U.S.-Iraq stand-off.

The Iraqi ambassador to India has lately been speaking to the Indian media about the positive role that India has been playing in its support for Iraq.

In a related development, Egyptian President Hosni Mubarak repudiated Thursday media reports of an Arab initiative asking Saddam to step down or take residence in an Arab country.

On Tuesday, December 24, Saudi Arabia denied reports it had advised Saddam to step down in order to avert a U.S.-led war.

"Contacts with Iraq by Saudi Arabia and all Arab countries have continued. We have not asked the Iraqi leadership to step down, maybe other Arab states did," Saudi Foreign Minister Prince Saud Al-Faisal told a press conference.

But the chief diplomat of the oil-rich kingdom declined to answer a question on whether Riyadh would grant Saddam political asylum if he quit power.