The listing in Washington means financial institutions in the United States must freeze the assets of the groups. It also brings US policy in line with the European Union, which declared them terrorist groups on June 19.

The groups' leaders are on a list of 20 suspects India wants Pakistani President Pervez Musharraf to hand over for trial.

The groups are Babbar Khalsa and the International Sikh Youth Federation, the Office of Foreign Assets Control in the US Treasury Department said.

The Treasury initially listed the Federation as a "foundation" on the list posted on the Web site of its Office Foreign Assets Control. That designation was changed later in the day.

They are the first Sikh groups designated by the United States in any category of terrorist organisation.

Dozens of militant groups have been blacklisted in the United States since followers of Osama bin Laden, the Saudi exile and Islamic militant, were accused of killing about 3,000 people in three American states with hijacked planes.

Babbar Khalsa—Tigers of the True Faith—and the International Sikh Youth Foundation both seek an independent Sikh homeland in Punjab.

Canadian and Indian authorities have linked the Babbar Khalsa to a June 23, 1985, bombing of Air India Flight 182 over the Atlantic that killed 329 people in what was the deadliest act of aviation sabotage until the September 11 attacks.

Three men are awaiting trial in Canada in connection with Flight 182 and a related attempted to blow up another Air India flight at the same time that accidentally killed two airport workers in Tokyo's Narita Airport.

The ISYF blamed media reports that it was a terrorist organisation when it announced in February that it was closing its Canadian operations. The area of Vancouver where the three suspects are awaiting trial is home to the largest Sikh population outside India.

Babbar Khalsa's founder, Talwinder Singh Parmar, was killed by Indian police in 1992. Canadian authorities named him as an unindicted conspirator in the Air India bombings when they laid charges in October 2000.

Wadhawan Singh Babbar is the current leader of the group, which was involved in an insurgency in India's northern Punjab province during the 1980s. Its airplane attacks were apparently in revenge for the Indian Army's 1984 storming of the Golden Temple.