NKorea nuclear talks edge towards potential deal

BEIJING, Feb 8 (Reuters) North Korea said it was willing to consider first steps to ending its nuclear arms programme at six-party talks that opened today, with China drafting a deal that could mark rare progress in the tortuous negotiations.

The US envoy to the talks, Christopher Hill, said negotiators were looking to end North Korea's production of the plutonium that fed its first nuclear test explosion last year.

''We're interested in addressing problems created by plutonium production in North Korea,'' Hill told reporters.

''We're not interested in just freezing, we are interested in moving toward taking steps toward the abandonment of these nuclear programmes.'' Russia's RIA news agency quoted unnamed diplomatic sources in the Chinese capital as saying the draft was distributed to national delegations late today night.

It proposes stopping within two months the work of North Korean nuclear sites, including the plutonium-producing Yongbyon reactor, and supplying Pyongyang with alternative energy sources, RIA said.

It added the delegations would start discussing the plan early tomorrow.

South Korea's envoy, Chun Yung-woo, said the potential deal would spell out parts of a 2005 agreement promising North Korea aid and security assurances in return for nuclear disarmament.

Participants have dismissed hopes of an immediate settlement of the long-burning nuclear standoff. But even limited agreement would ease tensions in volatile northeast Asia and be a diplomatic victory for the beleaguered Bush administration.

RICE OPTIMISTIC US Secretary of State Condoleezza Rice said a deal could be in sight. ''I am cautiously optimistic that we may be able to begin, again, to implement the joint statement of 2005,'' she told a congressional panel in Washington.

Since 2003, six-party talks have brought together the host China, the two Koreas, the United States, Japan and Russia in a stop-start effort to curtail Pyongyang's nuclear plans, which took a dramatic step forward with the October nuclear test.

In previous sessions, hopes of progress have foundered over North Korea's distrust of Washington and, since late 2005, the North's objections to a U.S. financial squeeze.

US envoy Hill did not rule out the current talks coming to nothing. But he said North Korea was finally considering specific steps towards curbing its nuclear activities.

''These would be set of actions, and not a set of pledges, but really a set of actions that would have to be taken in a finite amount of time,'' he told reporters.

''We think if we can get this first good step it will give us some momentum to get to the next step and the step after that.'' PLUTONIUM Many observers have homed in on the Yongbyon plant, which produces plutonium that can be used in weapons.

''North Korea needs to halt and seal its operations of the nuclear facilities in Yongbyon and accept verification and monitoring by the IAEA,'' Japan's chief delegate Kenichiro Sasae told Thursday's meeting, according to a draft of his speech.

He was referring to the International Atomic Energy Agency, which inspects nuclear facilities and oversees disarmament.

After the first day of talks, North Korea remained silent.

In December, Pyongyang's negotiator Kim Kye-kwan stymied hopes of a deal by focusing instead on objections to a US financial crackdown on what Washington said was clear evidence of North Korean counterfeiting of US cash and other misdeeds.

Kim told China's official Xinhua news agency before leaving Pyongyang he did not ''expect too much'' from the talks and their fate lay in US hands.

''We are prepared to discuss the initial steps, but the judgment (for the talks) should be based on whether the United States will come forward and abandon its hostile policy against us and co-exist peacefully,'' Kim said on arrival in Beijing.

REUTERS BDP PM2326