The Stalinist country said it would cooperate actively to end the nuclear standoff peacefully, according to a joint statement at the end of three days of high-level talks between the two Koreas.

"Sharing the view that the (September) agreement must be implemented as soon as possible for the denuclearization of the Korean peninsula, South and North Korea agreed to cooperate actively for the peaceful resolution of the nuclear issue," it said.

But North Korea stubbornly refused to respond to repeated requests from South Korea to agree to the early resumption of disarmament talks grouping the two Koreas, China, the US, Japan and Russia.

North Korea had insisted it would talk only with the United States about the nuclear standoff.

The North said Sunday that stalled six-party talks last held in November would be suspended indefinitely because Washington had imposed economic sanctions on it over allegations of illicit financial dealings, including counterfeiting and money laundering.

Back in September at the fourth round of six-party talks North Korea agreed in principle to dismantle its nuclear weapons program in exchange for diplomatic and economic benefits and security guarantees.

But at the last session in November it said US sanctions were blocking any progress.

The US Treasury Department in September told US financial institutions to stop dealing with a Macau bank, Banco Delta Asia, which it accused of being a willing front for North Korean counterfeiting.

A month later the US blacklisted eight North Korean companies allegedly involved in the proliferation of weapons of mass destruction.

Earlier, North Korean delegates staged a silent protest to press a demand that South Koreans visiting North Korea be allowed to pay homage to the Stalinist regime.

The 20-minute protest took place in the lobby of a hotel on the southern island of Jeju where the two Koreas have held three days of cabinet-level talks led by Unification Minister Chung Dong-Young, Seoul's chief delegate, and his North Korean counterpart Kwon Ho-Ung.

While Kwon, a cabinet councillor, was locked in a tense one-on-one meeting with Chung, other North Korean delegates carrying their bags gathered in the lobby, followed by bewildered South Korean officials.

South Koreans visiting North Korea must obtain permission in advance from their own government to visit politically sensitive sites such as statues and memorials to the state founder Kim Il-Sung.

"The most contentious issue has been North Korea's demand" that South Korean citizens be allowed to pay homage to the communist country, a South Korean official said.

The final statement vaguely reflected North Korea's demand by saying that the two sides should "respect and recognize each other's political system and ideology."

The two sides, who fought a war from 1950-53, agreed to hold a new round of direct and video reunions of separated families early next year, as well as a new round of Red Cross meetings to discuss humanitarian issues such as prisoners of war.

They agreed to hold high-level military talks at an early date next year.

Though economic exchanges have greatly increased following an inter-Korean summit in 2000, North Korea has balked at holding more high-level military talks on easing tension after two initial rounds.

The next round of cabinet-level talks will be held in March in Pyongyang.

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