US, China at odds over how to handle N Korea

While the United States sees China, Pyongyang's oldest ally, as the key to unlocking the standoff sparked by North Korea's October 9 nuclear test, Beijing thinks Washington needs to soften its stance towards the regime of Kim Jong-Il.

Rice, who on Sunday wrapped up a four-nation tour of Asia and Russia aimed at securing international support for UN sanctions against North Korea, hailed China's pledge to better monitor its border with the Stalinist state.

"Nobody wants to be on the wrong side of this resolution," she told reporters here on Friday after meetings with China's top leaders, underscoring the importance of Chinese backing for the raft of measures against Pyongyang.

A range of Chinese banks said last week they had suspended or restricted financial transactions with North Korea -- a sign of good intentions from Beijing, which approved the UN sanctions despite some reservations.

But special Chinese envoy Tang Jiaxuan, who met with Kim in Pyongyang last week, called on Washington to be "flexible" in its approach to North Korea so that six-party disarmament talks boycotted by Kim for a year could resume.

"This is in the interests of all sides and I hope the United States will take a more active and flexible attitude," Tang said.

North Korea walked out of the talks involving the two Koreas, China, Japan, Russia and the United States in November when Washington imposed sanctions to try to block the North's access to international banks.

Highlighting the difference of opinion on how to handle the crisis, one Chinese diplomat said the onus now fell solely on the United States to lure Pyongyang away from the nuclear brink and back to the negotiating table.

"Above all, it's a problem between the United States and North Korea," the diplomat, who asked not to be named told AFP.

"We were able to see that during the six-party talks," he added, explaining Washington and Pyongyang still harboured "Cold War" attitudes toward each other.

Marcus Noland, a North Korea expert at the Institute for International Economics in Washington, warned it would be difficult for the United States to backtrack on its financial sanctions.

"First, there is no public sympathy in the US for North Korea's counterfeiting. No public official can appear to be weak on this," he said.

"Second, now that there is a formal legal case in the US involving law enforcement and not just diplomatic agencies, the US government cannot simply drop the issue."

Given the current impasse, critics of the administration of US President George W. Bush say he should change tack and renew direct dialogue with Pyongyang, instead of leaving it to China to host the six-way negotiations.