Financial experts from the United States and the Democratic People's Republic of Korea (DPRK) met yesterday to address the US campaign to isolate the North from the international banking system, the key stumbling block blamed for Pyongyang's 13-month boycott of nuclear talks.

The meeting came on the sidelines of Six-Party Talks that entered a second day yesterday with discussions focused on the implementation of a disarmament pledge signed by the North last year.

The DPRK and US delegations to the talks also held their first one-on-one meeting yesterday afternoon, the Chinese press centre said.

The atmosphere there "was not so harsh," a Japanese official said on condition of anonymity due to the ongoing diplomacy.

The DPRK also met individually with the other countries at the talks China, Russia and the Republic of Korea (ROK) but not Japan, an ROK official said on condition he not be named.

"The gap in differing opinions is being narrowed little by little," the official said, declining to go into details because the talks are still in progress. "There are still many differences, but we expect to narrow the gap even more tomorrow."

Pyongyang had stayed away from the nuclear talks since November 2005, claiming Washington remained hostile to the DPRK because it blacklisted a Macau bank where the North deposited some US$24 million.

The US alleged the bank was complicit in the North's counterfeiting of US$100 bills and money laundering to sell weapons of mass destruction. American officials have urged other countries to bar DPRK accounts, saying all the country's transactions are suspect.

However, the North agreed to return to the nuclear talks weeks after its October 9 nuclear test because the US said it could discuss the financial issue in separate meetings.

Daniel Glaser, the US Treasury Department's deputy assistant secretary for terrorist financing and financial crimes, met with the DPRK delegation led by O Kwang Chol, president of the North's Foreign Trade Bank of Korea.

The talks were being held at the US Embassy, an embassy official said on customary condition of anonymity. The DPRK delegation departed after more than three hours of meetings.

Chinese Foreign Ministry spokesman Qin Gang said at a regular news briefing that Beijing hopes the two sides can "solve the issue properly."

"We wish to see them make positive achievements that we believe will facilitate the process of the (nuclear) talks," he said.

It is unlikely that the US would simply remove the restrictions as the North demands, since it views them as a legal matter against criminal activity that it wants halted.

Earlier yesterday, all six chief nuclear envoys met in a closed session at a Chinese state guesthouse for less than two hours. They also gathered for dinner. "The first step for us is to map out the measures that help realize the joint statement and to decide what moves we will take," said Chinese Vice-Foreign Minister Wu Dawei, according to the Chinese press centre.

The "joint statement" refers to a September 2005 agreement at the talks the only one ever reached in which the North said it would abandon its nuclear programmes in exchange for aid and security guarantees.

Source: China Daily