BEIJING yesterday furiously dismissed a report by The Washington Times that claimed it had obtained United States-made cruise missiles from Afghanistan's ruling Taleban, Xinhua News Agency reported.

Foreign Ministry spokesman Zhu Bangzhao also denied a Washington Times' report that two Chinese state-run telecommunications companies were helping the Taleban militia install a telephone system in Kabul - Afghanistan's capital.

``I would like to reiterate that the Chinese government has established no formal ties with the Taleban in whatever form,'' Xinhua quoted Mr Zhu as saying.

In the report, the newspaper, quoting the Iranian government news agency in December 1998, said Beijing and the Taleban had concluded a defence co-operation agreement.

The agreement came after the Talebanhelped to supply China with unexploded US cruise missiles fired during attacks on terrorist training camps in August 1998, the report said. The attacks were ordered by then-president Bill Clinton after terrorist bomb attacks on US embassies in Africa that year.

The newspaper also quoted the Pakistani newspaper Islamabad Ausaf as saying that alleged terrorist Osama bin Laden had, this August, called for ``good relations'' between Afghanistan and China, saying they were in China's interest and would reduce US military and economic influence in Asia.

The Washington Times also said, quoting US intelligence officials, two Chinese state firms, Zhongxing Telecom and Huawei Technologies, have been working on a telephone system in Kabul for the past two years. The system was described as a switching network to handle up to 130,000 users.

US intelligence reports of the Chinese co-operation contradicted Beijing's claims that no Chinese firms are working in Afghanistan, it said.

Mr Zhu said the report was entirely wrong.

``It needs to be pointed out that, since the September 11 incident, there are some people inside the US who always spread all kinds of rumours with ulterior motives, attempting to damage China's image,'' Mr Zhu said.

``These people's political plot can never succeed,'' he said.

The continued Chinese business support for the Taleban was raising questions among some Bush administration national security officials about Beijing's co-operation in the new effort against terrorism, the US report said.

A US defence official was quoted as saying: ``There's no doubt they [the Chinese] execute terrorists without trial in places like Xinjiang, but whether or not they will help us in fighting terrorism is another story.''

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