''*CHINA -NEPAL- RAIL*'''

China and Nepal have agreed to build a  railway connecting Tibet with Kathmandu, among a raft of deals signed during the Nepali prime minister's visit to Beijing, reports said on Friday.

Nepal is seeking closer ties and much-needed energy and infrastructure investment from China., which has flexed greater economic and diplomatic muscle in its Himalayan neighbour in recent years.

Beijing's growing presence has raised hackles in Nepal's traditional ally India.

The two countries signed more than 10 ''cooperative documents'' on Thursday during Prime Minister K.P.Sharma Oil's trip to China, according to the China Daily.

The rail route will link Nepal's capital with Gyirong trading port in the Tibetan city of Xigaze, according to the China daily, citing a Chinese vice foreign minister.

Indian media said the two sides signed agreements worth  $2.4 billion on Wednesday, with Chinese investors ploughing money into developing hydroelectricity, water resources, cement factories, fruit cultivation and farming.