No headway as US, N Koreahold another round of talks

Financial delegations from the two sides met for a second straight day to discuss US sanctions against North Korea, a pivotal dispute that Pyongyang has said must be resolved before it considers abandoning its nuclear programme.

However, with the US side saying the issue would not be resolved quickly and North Korea holding firm on a host of other demands, there were few hopes that the six-nation disarmament talks that began on Monday would achieve success.

Chief US envoy Christopher Hill said he had made some proposals to North Korean negotiator Kim Kye-Gwan during their initial one-on-one meeting on Tuesday through the six-party forum but that there was no breakthrough.

"I just don't know when we are going to end up or where we are going to end up," a weary-looking Hill told reporters in the lobby of his hotel yesterday morning.

While Hill did not go into specifics about what he had put forward, South Korean reports said the United States offered security guarantees, aid and other incentives to Pyongyang to tempt it into disarming.

The six-nation talks -- involving the two Koreas, the United States, host China, Japan and Russia -- began in 2003 in an effort to persuade Pyongyang to abandon its nuclear program.

Until Monday, North Korea had refused to attend the forum for 13 months due to objections over the US financial sanctions imposed against the regime for alleged money laundering and counterfeiting.

Many observers saw North Korea's protests over the sanctions as a stalling tactic, especially after the secretive nation stunned the world with its first-ever atomic test on October 9.

However the sanctions have seen bank accounts crucial to Pyongyang's ruling elite frozen, and North Korea has continued to insist they must be removed before it considers giving up nuclear arms.

North Korea had maintained the sanctions issue should be discussed through the six-nation forum, a demand the United States had rejected until the atomic test.

Finance experts from the two nations met for three hours at the US embassy to discuss the sanctions Tuesday, and held another five hours of talks on Wednesday, North Korean and US officials said.

However, at the start of the day the chief US official at the sanctions talks, Daniel Glaser, a Treasury Department's deputy assistant secretary, appeared to rule out any quick fixes.

"This has to be a long-term process... these are underlying concerns of the international financial community," Glaser told reporters on Wednesday before heading to the North Korean embassy for the talks.