Iranians witnessed N. Korean missile test-U.S.

WASHINGTON, July 20 (Reuters) One or more Iranians witnessed North Korea's recent missile tests, deepening U.S. concerns about growing ties between two countries with troubling nuclear capabilities, a top U.S. official said today.

Asked at a U.S. Senate hearing about reports that Iranians witnessed the July 4 tests, Assistant Secretary of State Chris Hill, chief U.S. negotiator with Pyongyang, replied: ''Yes, that is my understanding'' and it is ''absolutely correct'' that the relationship is worrisome.

Hill's comments are believed to be the first public U.S.

confirmation that Iranian representatives observed the seven tests: one launch of a long-range ballistic missile that failed soon after being fired, and six tests of short and medium-range missiles. Hill said the six hit their target range.

U.S. officials have long said Iran and North Korea are collaborating and cash-strapped Pyongyang was eager to sell missiles and maybe also nuclear material.

''Our understanding is that North Korea has had a number of commercial relations in the Middle East with respect to missiles'' but there is no evidence of Pyongyang trying to sell plutonium, a nuclear weapons fuel, Hill said.

North Korea-Iran ties are more worrisome now as the militant Islamic group Hizbollah, which is backed by Iran, trades rocket fire with Israel, Hill and Republican Sen. George Allen of Virginia said during the hearing of the Senate Foreign Relations Committee.

'NEED TO BE PREPARED' Hill also warned that North Korea, following missile tests that last week were formally condemned by the U.N. Security Council, could take additional steps.

It is hazardous to predict what North Korean leader Kim Jong-il might do next, but ''we need to be prepared for the idea that he's going to want to show what is in his view more and more strength,'' he said.

Hill doubted Pyongyang would give up its nuclear programs and as a result the situation in East Asia is ''not stable,'' with the beginning of a regional arms race and growing tensions between South Korea and Japan.

''This is not one of the problems that will get better if we leave it alone,'' he said. ''We've really got to work this.'' Hill repeatedly defended the current process of six-party talks -- involving the United States, North and South Korea, Japan, Russia and China -- as the best format for resolving the nuclear issue diplomatically.

Many U.S. experts have urged the administration to talk directly with the North to revive the six-party negotiations, which have been stalemated since November.

Hill said he met North Korean officials numerous times during the six-party process and if they come back to the table ''we will have as many bilateral meetings as they want.'' He described how aspiring big power China, the North's ''extremely generous'' patron, was defied in its strenuous diplomatic effort to persuade Pyongyang to forgo the missile tests and said this caused Beijing to rethink ties with the North.

Similarly, South Korea, whose policy of engagement with the North has often put Seoul at odds with Washington, is debating whether to modify its approach and Americans should let that play out without lecturing and interference, he said.

Reuters PKS DB2329