The United States said publicly for the first time that China had admitted defeat in the effort to resume the dialogue this year -- but said it was ready to get going as soon as possible in the new year.

"The Chinese got back to us and said, looking at the way the schedule had been anticipated, it was technically not possible to hold it this week," said State Department spokesman Richard Boucher.

"So we're now looking at early in the new year."

North Korea had earlier put the blame on Washington for the delay in the talks, which had been expected to go ahead this week in Beijing.

Boucher said Pyongyang was trying to negotiate the nuts and bolts of any accord to dismantle its nuclear program before any talks even took place.

"It shouldn't be a precondition of accepting the other side's proposals before you even sit down and talk," he said.

"We have not set any preconditions for the talks and we don't think the North Koreans should either."

President George W. Bush, who insisted on the multilateral approach to dialogue, rejecting Pyongyang's demand for one-one-one talks, put a more positive spin on the situation.

"In North Korea we are now in the process of using diplomatic means and persuasion to convince Kim Jong-Il to get rid of his nuclear weapons," Bush said, referring to North Korea's leader.

"It's been successful thus far in convincing others that they have a stake," he said, noting that China, Japan, South Korea and Russia had joined the United States in seeking a peaceful way to denuclearize the Korean peninsula.

"I am pleased with the progress we are making," Bush told reporters at a news conference.

North Korea's ruling Workers Party newspaper, Rodong Sinmun earlier said the proposal ignored Pyongyang's own offer of "simultaneous actions" to defuse the crisis, including a nuclear freeze in return for concessions from the United States.

"The US wasting time would do the DPRK (North Korea) nothing bad," Rodong said in Pyongyang's first reaction to the US offer. "Its delaying tactics would only result in compelling the DPRK to steadily increase its nuclear deterrent force."

The newspaper indicated that the sticking point in the US proposal was Washington's long-standing demand for verification of a North Korean agreement to scrap its nuclear weapons program.

It said the US proposal which Pyongyang received last week "did not mention the DPRK-proposed simultaneous package solution at all" and urged North Korea to "scrap nuclear weapons program first."

The United States, China, Russia, Japan and the two Koreas held a first round of talks in Beijing in August, but failed to end the crisis that erupted in October last year when Washington accused Pyongyang of running an enriched uranium program in violation of a 1994 nuclear freeze accord.

China-led diplomatic efforts have been brisk in recent weeks to open a second round of six-nation talks by the end of this year, preferably for December 17 to 19.

But the new talks are widely expected to be pushed back to January due to wide US-North Korean differences over a draft statement to be adopted at the second round, according to media reports in Seoul and Tokyo.

North Korea has demanded a legally binding security guarantee from the United States in return for abandoning its nuclear ambitions. Washington wants the nuclear program scrapped first.

Chinese Foreign Minister Li Zhaoxing urged US Secretary of State Colin Powell in a phone conversation late Sunday to ease the US stance on North Korea to keep alive the six-nation talks, according to the Xinhua news agency.

"Li briefed Powell of China's stand on the issue and expressed hope for the US side to take a more flexible and practical attitude in preparation for the next round of six-party talks in Beijing," Xinhua said.

The State Department sidestepped the Chinese call.

"I think what the Chinese have said is they're looking for all the parties to the talks to take a flexible and pragmatic attitude, so I'd merely restate, the position of the United States is we have been working and are willing to work with the Chinese to establish a good basis for talks."

WAR.WIRE