US hopes for 6-way Korea nuclear talks in July

TOKYO, June 19 (Reuters) North Korea should move quickly to shut down its source of bomb-grade plutonium, a top US envoy said today, voicing hope that stalled six-party talks on scrapping its nuclear arms programme could resume in early July.

But shortly after US Assistant Secretary of State Christopher Hill arrived in Tokyo for talks with his Japanese counterpart, Japan's NHK television said North Korea had fired a short-range missile towards the Sea of Japan.

Quoting a Japanese government source, NHK said one missile had been launched earlier in the day. NHK said it was not a ballistic missile.

Chief Cabinet Secretary Yasuhisa Shiozaki declined either to confirm or deny reports of the missile launch, but told reporters: ''I don't think we're currently in a situation where Japan's national security has been significantly affected.'' Hill, speaking to reporters before word of the missile launch, sounded an optimistic note ''I'm very hopeful we can get to the six-party talks of some kind in early July,'' he said after arriving in Tokyo.

Hill said that North Korea appeared to have received the funds it had demanded be released from a frozen bank account in Macau as a condition for closing its only nuclear reactor, the source of its weapons-grade plutonium.

''As far as we know, it has been transferred. I am sure that money is in the North Korean bank account,'' Hill said in Seoul earlier.

North Korea said at the weekend it would allow UN nuclear inspectors into the country as part of a disarmament deal after nearly 25 million dollars in blocked funds had started to make its way back to the impoverished country.

IAEA VISIT The International Atomic Energy Agency (IAEA) plans to send a senior delegation to North Korea next week to agree details for a return of its inspectors to monitor the reactor shutdown, agreed to under Pyongyang's Feburary 13 deal with major regional powers.

''We want the IAEA to be able to quickly make an agreement and get on with shutting down the reactor,'' Hill told reporters in Seoul, where he met South Korean officials.

China, chief backer of the reclusive state, praised North Korea for its latest move.

''We believe that this step shows North Korea's sincere will to implement the Feb. 13 joint document and express our welcome,'' Foreign Ministry spokesman Qin Gang said.

Qin told a Beijing news conference: ''We also hope that all the concerned parties will continue taking positive steps, will conscientiously abide by their commitments and take actions in a comprehensive and balanced way.'' North Korea plans to seal the reactor at Yongbyon, about 100 km (60 miles) north of Pyongyang, in the second half of July, Russia's Interfax news agency quoted an unidentified North Korean diplomatic source as saying on Monday.

Pyongyang, which tested its first nuclear device last October, is widely believed to already produced enough material for several weapons.

TWO-MONTH DELAY Despite more than two months of delay in starting to dismantle the North's atom bomb programme, it would still be possible to complete the nuclear disarmament of the communist state by the end of the year, Hill has said.

The North missed a mid-April deadline to shut its Soviet-era reactor agreed to under the Feburary 13 deal. Its money had been blocked by Washington for suspected ties to Pyongyang's alleged dollar counterfeiting and other illicit activity.

If Pyongyang keeps its part of the deal and shuts down its nuclear facilities, the United States is likely to provide the economically struggling state with 2 million dollars worth of emergency humanitarian aid, Japan's Mainichi newspaper reported.

In Tokyo, Hill was set to meet Kenichiro Sasae, Japan's envoy to the six-party talks, which bring together the two Koreas, China, the United States, Russia and Japan.

Analysts said Hill was likely to urge Japan to ease its tough stance with North Korea in a feud over citizens kidnapped decades ago so that it could take part in providing energy aid to the North.

Such a change in stance would be tough for Prime Minister Shinzo Abe ahead of a national election expected in July.

In public, Hill stressed that the abduction issue -- an emotive one for many Japanese was also vital to Washington, but added that progress on denuclearisation could help build a base for progress on the kidnappings.

Separately, Philippine Foreign Secretary Alberto Romulo left Beijing for Pyongyang to meet North Korea's number two leader, Kim Yong-nam, and newly appointed Foreign Minister Pak Ui-chun.

Romulo told Reuters ahead of his visit that he would invite Pak to the ASEAN Regional Forum (ARF) in Manila on August 2.

ARF is the Asia-Pacific's main security grouping. In addition to the 10 members of the Association of Southeast Asian Nations, it brings together other countries, including all of the participants in the six-party talks.

REUTERS JK RN1659