India?s ruling Hindu nationalists have made strong gains in four Hindi heartland state elections, according to early returns on Thursday.

But the Bharatiya Janata Party (BJP), the main party in the national ruling coalition, ruled out calling an early general election on their good showing. Election Commission counting from Monday?s elections showed the BJP was virtually assured of winning two states and leading in a third, strengthening the hand of a faction in the party pressing for early national elections in February or March.

But as hundreds of joyous supporters celebrated at BJP offices, a senior party official ruled out an election before the current term ends in October 2004. ?At no point of time we thought of advancing the elections,? Pramod Mahajan said after Prime Minister Atal Behari Vajpayee met party leaders. ?The PM wants to complete the term.? Congress, which leads the national opposition, ruled all four of the states going into the election. Opinion polls had forecast the BJP winning only the biggest, Madhya Pradesh.

But barely two hours after counting started, Congress conceded that state and a few hours later preliminary data showed the BJP had won a majority in Rajasthan and led in Chhattisgarh. Congress leads only in Delhi. ?It is a dress rehearsal for Lok Sabha (federal parliament) elections,? Mahajan told reporters. "This victory has increased the morale of BJP workers.:

<B>Setback for Congress</B>

The results are a tough blow to Congress, whose Italian-born leader, Sonia Gandhi, is struggling to win acceptance as a possible prime minister and who trails Vajpayee in opinion polls.

?We did not gauge the extent of this defeat,? senior Congress official Ambika Soni told reporters. ?It?s important for us to... pinpoint where we went wrong, why we were not able to gauge this kind of setback.?

Financial markets regard any gains as a strong plus for the BJP and likely to bolster its economic reform programme.

Although a positive political climate fed by low interest rates and good monsoon rains is encouraging some BJP activists to press for an early election, there are some key obstacles, in addition to Vajpayee?s public commitment to a full term.

The BJP is in disarray in the most populous state, Uttar Pradesh, which accounts for 80 of the 545 members of parliament ? more than the combined 72 of the four states being contested. The large southern state of Andhra Pradesh, ruled by a key BJP ally, will also go to the polls early in the new year.

Vajpayee is preoccupied by a delicate peace process with neighbour and rival Pakistan, which he is due to visit for a summit of regional leaders in January. The BJP-led coalition government is still widely expected to hand down a populist pre-election budget in the new year.

Stocks were flat on the main Bombay market after a six-day rally, as traders awaited the final outcome. The four state assembly elections were fought largely on local personalities and issues such as electricity and water shortages. But they allowed the BJP and Congress to put their campaign machines through their paces.

Terry FrieL