Japan said yesterday it saw no hope of a breakthrough in talks on scrapping North Korea's nuclear weapons, accusing Pyongyang of using a financial dispute with the US to drive a stake into a proposed deal.
Japanese chief envoy Kenichiro Sasae's downbeat comments jarred with guarded optimism voiced earlier in the day by US delegation leader Christopher Hill.
Sasae said after four days of negotiations in Beijing that there were "no prospects of a breakthrough," with North Korea refusing to budge on its demand that Washington first lift banking curbs targeting the North.
"North Korea's position on the financial issue is rigid and we don't see any flexibility. This is the biggest cause of difficulty," Sasae told reporters. "There is no change in the basic structure of conflict."
Hill said his country and North Korea were exploring possible first steps to implement a September 2005 accord offering the poor and isolated state aid and security assurances in return for nuclear disarmament.
"We do believe that there are some elements of that September agreement that should begin to get implemented even this week," Hill told reporters. "This is not an easy phase, and I don't want to predict that we're going to succeed."
A South Korean official said the North was refusing to budge without a US climbdown on accounts frozen at Macau's Banco Delta Asia, which the US says was a "willing pawn" through which Pyongyang engaged in counterfeiting and money-laundering.
Separate talks between North Korea's foreign banking arm and US Treasury officials ended on Wednesday with no breakthrough on the finance dispute, but those talks may resume in January.
Hill said he aimed for agreement by today in the nuclear talks between the US, the two Koreas, Russia, Japan and host China. These resumed on Monday after a 13-month break.
The six envoys met about 10 weeks after North Korea carried out its first nuclear test, drawing international condemnation and UN sanctions -- backed even by China, its chief aid provider.
Hill said that any agreement had to have teeth to deter North Korea from backsliding.
"We cannot have a situation where they pretend to do something, we pretend to believe them," he said.
Meanwhile, a South Korean lawmaker said yesterday there were signs North Korea could conduct a second nuclear test.
Representative Chung Hyung-keun of the main opposition Grand National Party, a former intelligence official, said North Korea dug two underground tunnels at a mountain in the country's northeast and used one of them for its earlier nuclear test.
"There has been brisk activity since this month" at the other tunnel, he said.
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