N Korea shows no compromise at nuclear talks-envoys

BEIJING, Dec 19 (Reuters) Negotiators saw no compromise in bruising six-party nuclear disarmament talks with North Korea today and urged Pyongyang to come to the table with a realistic offer -- and a festive spirit.

Today was the second day of negotiations in the six-party talks, which resumed in the Chinese capital after a hiatus of more than a year.

On the opening day, North Korean envoy Kim Kye-gwan pressed sweeping demands in return for scrapping nuclear weapons, starting with lifting UN sanctions and US financial curbs and the provision of a new nuclear reactor.

''Basically there has been no major change in what they said yesterday,'' a Japanese diplomat told reporters after the second day's talks, adding that North Korea showed no sign of softening.

''We still can't see where their true intention is.'' The top US envoy to the talks, speaking before the second day's session, was also gloomy.

''I think I would be hard-pressed to say any progress was made,'' US Assistant Secretary of State Chris Hill told reporters.

''Certainly there was nothing I heard in the plenary (meeting) to fill me up with a sense of holiday spirit,'' Hill said, speaking beside a towering Christmas tree in his hotel lobby.

The six-party meeting of envoys from the two Koreas, the United States, China, Japan and Russia are being held held in the shadow of Pyongyang's first nuclear test, on October 9.

Washington imposed the financial curbs last year after determining that Pyongyang was involved in money-laundering and counterfeiting US dollars. The UN Security Council authorised sanctions in October after condemning the nuclear test.

Even China, generally eager to stress progress in the talks it has hosted since 2003, said the meeting had exposed rifts.

''Some of the differences between the sides are quite clear and some disputes are quite sharp,'' Foreign Ministry spokesman Qin Gang told a news conference today.

Hill suggested North Korea had not made a serious pitch and had much to lose if the talks failed.

''They should come to it in a mood of trying to reach a deal,'' he said of the impoverished state. ''They need a lot of things. They need food, electricity. They don't need nuclear weapons.'' HARD BARGAINING Hill and other envoys suggested that North Korea may trim its demands in coming days.

South Korean envoy Chun Yung-woo said Pyongyang's ambitious list of demands was a predictable bid to bolster its bargaining position, not a final offer.

China said it favoured steadily implementing a September 2005 agreement in which North Korea agreed in principle to give up its nuclear weapons in return for aid and security guarantees.

''Putting it into practice in stages is the reasonable and realistic choice,'' China's chief negotiator Wu Dawei said in a statement.

But there was no agreement on a ''work plan'' China has proposed to reinvigorate diplomacy, the Japanese diplomat said.

North Korea may offer to curtail some nuclear activities, as it seeks to divide its critics and placate China, its chief aid provider, said one observer.

''They may make tactical concessions. North Korea wants to give China some face,'' said Shi Yinhong, an international security expert at the People's University in Beijing.

North Korea boycotted the six-party talks for 13 months, saying it objected to the US financial crackdown.

A separate US Treasury Department team met Pyongyang bank officials on Tuesday to discuss the financial curbs, but analysts saw slim hope those talks would bring a breakthrough.

The US envoy Hill met his North Korean counterpart Kim today afternoon, the Japanese diplomat said, without offering any details.

The Chinese spokesman Qin said China had no deadline for the talks, raising the possibility of them dragging into Christmas.

''I'd suggest the participants exercise more patience and they'd best train for a marathon,'' he said.

REUTERS PDM KN1715