US says N Korea returning to talks

WASHINGTON, Oct 31 (Reuters) North Korea has agreed to return to six-party talks and Washington hopes a new round will be held before year's end, a senior US official said today.

The official confirmed that US envoy Chris Hill had met in Beijing with North Korean and Chinese counterparts and the North Koreans had ''agreed to return to talks.'' ''Chris had a trilat (meeting) in Beijing with Chinese and DPRK representatives. They agreed to return to talks. We hope for a resumption date before the end of the year,'' he told Reuters.

The official, who spoke on condition of anonymity, said that implementation of UN sanctions, imposed earlier this month after Pyongyang had conducted its first nuclear test, would continue.

Six-party talks, involving the United States, South Korea, Japan, Russia, China and North Korea, have been deadlocked for a year over Pyongyang's objections to a US crackdown on its international financial assets.

The Bush administration had internally debated compromise proposals that would give the North a face-saving away out of this controversy but it was unknown if that was part of the agreement that caused Pyongyang to agree to return to talks.

Another senior official who spoke to Reuters yesterday had ruled out any special inducements on this point. He stressed that the United States had said for some time that if the North returned to negotiations, the issue of Pyongyang's frozen financial assets could be discussed in that context.

REUTERS AKJ BST1817