MILAN, July 12 (Reuters) - Italy"s competition watchdog said on Monday it had cleared, with conditions, Telecom Italia"s (TLIT.MI) proposed acquisition of some of British telecoms group BT"s (BT.L) business units in the country. The two telecoms companies said in December they had signed a preliminary agreement for a sale of the units, while the watchdog started an inquiry into the proposed deal in April.