U.S., N. Korea to discuss sanctions

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SEOUL (AP) -- The United States and North Korea have reached a tentative agreement to hold talks on a dispute over U.S. financial restrictions against the communist regime in the week starting Jan. 22, South Korea's foreign minister said yesterday.

Song Min-soon made the remark after arriving from Washington, where he met Friday with Secretary of State Condoleezza Rice.

"A date has not been set, but the North and the U.S. provisionally agreed to hold the talks in the week starting Jan. 22," he told reporters. "I think it will be held around that time."

The financial dispute was the main stumbling block that deadlocked last month's six-nation talks on North Korea's nuclear programs. The North insisted that Washington lift the financial restrictions first before disarmament discussions begin in earnest.

Financial analysts from Washington and Pyongyang held separate talks on the sidelines of the nuclear talks -- involving China, Japan, the two Koreas, Russia and the United States -- but no progress was reported. The two sides agreed to continue the talks, but did not set a date.

Washington imposed the restrictions against a Macau-based bank holding North Korean accounts for Pyongyang's reputed involvement in counterfeiting and money laundering. That led to a freezing of the North's assets at the bank worth around $24 million.

North Korea says the sanctions are evidence of Washington's "hostile policy" and indicate its intention to overthrow the regime, and the North therefore needs nuclear weapons for protection.

Washington has denied it intends to invade the country, and says the restrictions are a law-enforcement matter unconnected to the nuclear issue.

Mr. Song said he and Miss Rice also agreed that their two countries could consider providing additional incentives for North Korea, providing Pyongyang agreed to take initial steps toward giving up its nuclear program.

He did not elaborate on the additional measures, but Yonhap news agency quoted him as saying that they would reflect "what North Korea wants." Mr. Song said the incentives would be dependent on Pyongyang taking initial steps toward implementing a 2005 accord in which it agreed to give up its nuclear programs in exchange for security guarantees and aid.

The move comes amid speculation that Pyongyang might be preparing for a second nuclear test, following its first on Oct. 9, although officials in South Korea, the United States and Japan have said there was no concrete sign a test is imminent.

Yesterday, a South Korean opposition lawmaker claimed that North Korea might be ready for another test.

Rep. Chung Hyung-keun made a similar claim last month, saying the North dug two underground tunnels at a mountain in the country's northeast, used one for its October nuclear test and there was brisk activity at the other tunnel.

Mr. Chung claimed in an article posted on his Web site yesterday that test preparations at the unused tunnel are believed to have been completed. He did not give a source for his information.

The lawmaker said, however, that the North is unlikely to go ahead with a test while its negotiations with the United States go on.