North Korea has threatened to boycott nuclear disarmament talks unless the United States lifts financial sanctions. But the Bush administration is stepping up pressure, voicing growing impatience with slow progress in the nuclear talks.

Embarrassed by the poor prospects for future talks, South Korea has strived to keep the dialogue momentum afloat, proposing an informal gathering of chief nuclear negotiators from the six nations involved the multilateral talks.

On Tuesday, North Korea said it would not return to the six-nation discussions until the United States lifts its financial sanctions against the communist state.

"It is impossible to resume the six-party talks under such provocative sanctions applied by the United States upon the DPRK (North Korea)," said Rodong Sinmun, North Korea's state-run newspaper.

The U.S. Treasury Department in September suspended transactions between U.S. financial institutions and Macau-based Banco Delta Asia after the bank was named as North Korea's money-laundering instrument. U.S. officials said the bank was also deeply involved in distributing fake currency from North Korea.

Banco Delta Asia has denied the allegations, saying its relationships with North Korean clients were legitimate and purely commercial, but it suspended transactions with the communist state. North Korea has denied the U.S. allegation.

The U.S. administration has also frozen the U.S.-based assets of eight North Korean companies suspected of being implicated in the proliferation of weapons of mass destruction.

U.S. officials suspect the illegal activities have helped finance Pyongyang's nuclear weapons programs, saying the sanction issue is not relevant to the nuclear talks but a matter to be handled by law-enforcement authorities. They also ruled out the possibility of a one-on-one meeting with North Koreans over the financial issue.

In an angry response, North Korea turned down Washington's offer of a briefing to explain the reason behind the financial sanctions it implemented against the reclusive regime.

North Korea said Tuesday it is "nonsense both logically and diplomatically to argue that the financial sanctions are unrelated to the six-way talks."

"The United States should respect its dialogue partner to comply with the spirit of the agreement and it should not take any action to create obstacles that impede the progress of the six-party talks," said Rodong Sinmun said.

If Washington genuinely wants to see the talks progress, it should take substantial measures to lift the financial sanctions against Pyongyang as early as possible, Rodong said.

"This would brighten the prospects of resuming the six-way talks," it said. South Korean officials downplayed North Korea's threat to boycott the talks, describing it as a routine tactic employed to increase its negotiation leverage, but expressed concerned about stalled nuclear negotiations.

With no date set for the resumption of the six-nation nuclear talks, South Korean officials said the sanction issue should not hurt the disarmament talks.

South Korea's top nuclear negotiator, Deputy Foreign Minister Song Min-Soon said tension over U.S. sanctions on North Korea must be quickly addressed to allow six-nation talks to go ahead.

"The six-way talks and the issue of financing in Macau are not directly related, but they are indirectly affecting each other," Song told a local radio program.

Song compared the dispute to "a traffic accident on the road" for the six-way talks. "We have to quickly address the situation to secure the passage on the 'six-way talks' road," he said. "It should be handled based on facts and in line with international regulations."

Song visited Beijing over the weekend to find ways to break the nuclear impasse. China, which hosted the previous round of six-nation talks, is believed to have influence with North Korea.

Song proposed a gathering of chief nuclear negotiators in a South Korean southern resort island of Jeju before the end of the year to discuss ways to resume the six-nation talks, which involve South and North Korea, the United States, China, Russia and Japan.

"We are saying 'let's talk freely without any specific topic' by gathering unofficially before the next part of the six-party talks," Song said.

Song left for Malaysia on Tuesday for the ASEAN+3 Meeting and the East Asia Summit. He plans to meet his Japanese counterpart on the sidelines of the meeting to discuss the nuclear standoff.

Seoul's top security policymaker, Chung Dong-young, urged the United States to hold direct talks with the North to resolve non-nuclear concerns. "As the six-party talks focus on resolving the nuclear issue, other matters should be separated from the six-party issue," he told a Seoul forum.

South Korea also plans to use high-level inter-Korean talks slated for next week in Jeju to persuade North Korea to return to the nuclear talks.

But prospect seems dim because Pyongyang and Washington are also tackling over human rights and other issues, such as food aid and Iran's nuclear drive.

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