Hopes for progress low as North Korea talks resume

BEIJING, Dec 18 (Reuters) Six-country talks on scrapping North Korea's nuclear arms resumed today after a one-year standoff, but hopes for swift progress were dim after Pyongyang presented a ''department store'' of its own demands.

US envoy Chris Hill told reporters before joining other negotiators in a secluded Beijing state guesthouse that he hoped to be home for Christmas, avoiding a marathon session at the hexagonal negotiating table.

But North Korea's opening speech at the talks took a ''department store approach,'' presenting ''an exhaustive list of all its demands'' and demanding that Washington end a ''hostile policy'' before Pyongyang reins in its nuclear arsenal, a South Korean official told reporters.

Beijing said the first six-party talks between the two Koreas, the United States, China, Japan and Russia since Pyongyang staged its first nuclear test on October 9 would be tough.

''The issues to be discussed and addressed by this meeting are complex and profound, and the tasks borne by all the parties are both glorious and arduous,'' Chinese Vice Foreign Minister Wu Dawei told delegates, the Xinhua news agency reported.

The six teams, accompanied by a throng of interpreters to translate the arcane terminology of nuclear diplomacy into five languages, would discuss ''specific measures'' to implement a joint statement of September 2005, according to Wu.

In that statement, North Korea agreed in principle to give up nuclear weapons in return for aid and security guarantees.

''We demand North Korea take prompt action in line with promises it made in the joint statement,'' the chief Japanese negotiator Kenichiro Sasae told envoys, according to a text given to reporters. ''It's up to North Korea to choose what path. The opportunity must not be wasted.'' But most officials and observers believe this week's talks are unlikely to draw swift compromise from an emboldened North Korea, which now calls itself a nuclear state.

FINANCIAL STANDOFF Details of North Korea's demands were unavailable, but they appear likely to dwell on calls for Washington to end a financial squeeze imposed after the US determined that Pyongyang had counterfeited American money and laundered cash.

On the eve of the meeting, the North's chief envoy, Kim Kye-gwan, told Washington to drop the financial restrictions if it wanted the 2005 accord implemented.

A South Korea official said the US and North Korea envoys were likely to have two-way discussions today afternoon.

And a separate US Treasury Department delegation is expected to meet the North Koreans to discuss the financial standoff.

US envoy Hill has urged North Korea to focus on the nuclear dispute, and warned that Pyongyang faces deeper isolation if it does not make good on its disarmament promise.

''If they want a future with us, if they want to work with us, if they want to be a member of the international community, they're going to have to get out of this nuclear business,'' Hill said yesterday.

Washington has found an increasingly close ally in China -- North Korea's traditional ally, neighbour and key aid provider -- which was angered by Pyongyang's refusal to heed Beijing's calls for restraint before the nuclear test. China later gave crucial backing to UN sanctions against the North.

Most Chinese analysts agree that the nuclear blast galvanised Beijing policy-makers to pressure Pyongyang more actively.

''Beijing's policy has changed markedly. Now China is pushing North Korea harder than before to keep its commitments in the joint statement,'' said Zhu Feng, an international security expert at Peking University.

Reuters MS VP1258