US sees "basis for progress" in N Korea talks

BEIJING, Jan 22 (Reuters) A US envoy said today China could announce a date soon for a resumption of six-party talks on North Korea's nuclear programme and he saw potential for progress.

China hosts the talks, grouping the two Koreas, the United States, Japan and Russia, which began in 2003 with the aim of persuading Pyongyang to abandon its nuclear arms ambitions. The last session in December broke up inconclusively.

''We hope that the Chinese government will be able to announce soon the start-up of the talks,'' US Assistant Secretary of State Christopher Hill told reporters before returning to Washington, adding that Beijing would have to consult other participating countries before setting a date.

The urgency of making headway in the talks has grown since reclusive North Korea defied international warnings last October and conducted its first nuclear test, triggering UN sanctions.

The December session appeared to be making progress on how to implement a September 2005 statement promising the impoverished North economic and political assurances in return for nuclear disarmament.

But those prospects unravelled, with Hill blaming Pyongyang's negotiators' insistent focus on US financial restrictions and their lack of authority to negotiate on the nuclear deal.

REACTOR FREEZE? Hill suggested today that those roadblocks would be cleared at upcoming talks after he and North Korean envoy Kim Kye-gwan held three days of bilateral talks in Berlin last week.

''Based on all the consultations we've had in the last week or so, I think we have a basis for getting together as soon as possible in the six-party process and making progress,'' he told reporters after meeting Wu Dawei, China's chief negotiator. He cautioned, though, that there was no certainty of a breakthrough.

Hill's comments came on a day of accelerating diplomacy over the nuclear negotiations.

South Korean envoy Chun Yung-woo, who arrived in Beijing today, said he did not rule out a meeting with North Korea's Kim, who also flew in.

Japan's envoy to the six-party talks, Kenichiro Sasae, would go to Beijing on Wednesday to talk with China's envoy, the Japanese Foreign Ministry announced.

A South Korean newspaper reported today that North Korea had offered at the Berlin talks to freeze activity at its nuclear reactor and allow international nuclear inspectors back into the country in return for energy aid.

But North Korea also demanded greater US flexibility on the financial crackdown as part of initial steps towards ending its arms programme, the Chosun Ilbo said, quoting diplomatic sources in Seoul and Beijing.

Hill said that Beijing's test this month of an anti-satellite missile that blew apart a Chinese satellite, prompting alarm in Washington, would not interfere with the six-party talks.

Financial negotiators from Washington and Pyongyang are to meet soon for a fresh round of two-way talks on the US financial restrictions. These were imposed after Washington determined that North Korea had been counterfeiting US money and using a Macau bank as a channel for illicit earnings.

Japanese Foreign Minister Taro Aso said yesterday that the earliest possible date for reopening the talks was early February, Kyodo news agency reported.

But in another reminder that suspicions between Pyongyang and Washington run deep, North Korea's official KCNA news agency today denounced the recent deployment of a US stealth fighter squadron in South Korea as a slap in the face.

''It is a brazen act of provocation to direct the newest military tools against a dialogue partner while saying dialogue is important,'' it said.

Reuters SP GC1717