N.Korea eyes 2nd test if dispute not resolved(financial talk ends, Russia issues warning)

North Korea will feel compelled to announce plans for another nuclear test if a financial row with Washington is not settled, a source said on Wednesday as the latest talks wound up with no signs of a breakthrough.

U.S. Deputy Assistant Treasury Secretary Daniel Glaser, after meeting North Korean officials in Beijing on the financial dispute, described discussions as "painstaking."

The U.S. Treasury has accused North Korea of using Macau's Banco Delta Asia to launder earnings from counterfeit U.S. dollars and drug trafficking.

But a source close to the North Korean government said Pyongyang felt Washington lacked evidence of wrongdoing and wanted a quick solution.

North Korea was likely to express its frustration when it comes to six-party talks, aimed at dismantling its nuclear programs, scheduled for February 8 in Beijing, the source said.

"If the United States does not resolve it, North Korea will have no choice but to announce at the six-party talks that it plans to conduct another test," the source told Reuters after being briefed by a North Korean official.

The last session of talks grouping the two Koreas, the United States, Japan, Russia and host China was held in December -- two months after Pyongyang dramatically raised the stakes by holding its first nuclear test. It yielded no breakthrough.

The December session snagged over Pyongyang's complaints about the U.S. financial crackdown that led to Macau freezing $24 million in North Korean accounts.

Glaser told reporters he was sure North Korea was up to no good at the Macau bank. "We've been vindicated with respect to our concerns," he said.

But he said the latest talks, following negotiations in December, had yielded hopes of a settlement. The negotiators had discussed almost 50 account holders in the Macau bank, he said.

"We got some information that was very helpful to us," Glaser said, adding there was hope "to start moving forward and trying to bring some resolution to this matter."

There would be more financial talks, but no date has been set, Glaser said, adding that U.S. concerns went well beyond the Macau bank.

China's envoy to the six-party talks, Wu Dawei, told reporters that the next session could be relatively short, apparently placing an onus on negotiators, including North Korea's, to reach a deal this time.

"I hope the meeting can complete its talks in three to four days," Wu said. The success of the talks, he said, "requires efforts of all parties."

But U.S. officials have held out little hope of a quick resolution to the financial dispute, and Russia and South Korea also cautioned against expectations of a breakthrough.

"I think there is almost no chance of finding concrete, significant agreements during these talks," Russia's Alexander Losyukov, a deputy foreign minister, told Interfax news agency.

The Beijing-based source described the U.S. financial curbs as a "huge insult" to a sovereign country.

"If the United States does not resolve it, North Korea would be a 'sinner' taking part in the six-party talks ... North Korea would have no face and could not be on equal footing with the other parties at the six-party talks.

"The United States has no evidence, just like it had no evidence Iraq had weapons of mass destruction," the source said.

In Washington, the State Department said the U.S. view was that the financial dispute was separate from the six-way talks. "The financial discussions are not being held as part of six party talks and they are not related to issues of denuclearization of the Korean peninsula," spokesman Tom Casey told reporters.

The North Korean Embassy in Beijing declined to comment. The Chinese Foreign Ministry had no immediate comment.

(Additional reporting by Chris Buckley in Beijing, Jack Kim in Seoul, George Nishiyama in Tokyo and Maria Golovnina in

http://asia.news.yahoo.com/070131/kyodo/d8n0ancg0.html

U.S., N. Korea wrap up 2 days of financial talks

(Kyodo) _ The chief U.S. delegate to talks with North Korea on U.S. financial sanctions imposed on Pyongyang said Wednesday that the two countries had ended two-days of talks in Beijing after agreeing to meet again, but without a date for the next round. Daniel Glaser made the remarks to reporters.

http://news.yahoo.com/s/afp/20070131/wl_asia_afp/nkoreanuclearweapons_070131194222

Russia warns North Korea over nukes 'threat' by Sebastian Smith Wed Jan 31, 2:49 PM ET

North Korea's nuclear weapons capability threatens Russian interests, Moscow's chief negotiator at international talks with Pyongyang said Wednesday, warning the country against carrying out another military test.

"Our interests are under threat," Alexander Losyukov was quoted as saying by Interfax news agency, also cautioning North Korea against a repeat of last October's atomic bomb test.

"I think a very negative reaction would follow another test and that tougher measures would probably be taken," he said.

Analysts said Losyukov's statement marked a hardening of the Russian position on North Korea ahead of February 8 talks in Beijing -- involving China, Japan, South and North Korea, Russia and the United States -- to try to persuade Pyongyang to give up its military nuclear programme.

According to Losyukov, "concrete" results are unlikely in Beijing, but "it could be possible to lay out quite precisely the route toward achieving them."

Reflecting the growing flurry of diplomatic activity ahead of next week's negotiations, Russian Foreign Minister Sergei Lavrov talked by telephone with his South Korean counterpart Song Min-Soon to discuss "resolving the nuclear problem on the Korean peninsula," Interfax reported.

South Korea's negotiator to the six-nation talks, Deputy Minister Chun Young-Woo, was due to meet with Losyukov in Moscow on Thursday to discuss a "road map" plan on the issue.

The last round of talks in China in December ended in deadlock after Pyongyang demanded the lifting of US sanctions imposed for alleged money laundering and counterfeiting.

The talks have continued intermittently since 2003, but gained new urgency when North Korea conducted its atomic test.

Viktor Kremenyuk, deputy director at the USA-Canada think tank, said that Losyukov's message indicated that Russia was cutting back on longtime diplomatic support for North Korea.

"Russia's position has shifted and that could help push North Korea into a deal. They will see that no one is fighting for them," he said.

Another analyst, Anatoly Dyakov, head of the Centre for Study of Disarmament, Energy, and Ecology, said that Russia was right to toughen its stance.

"If Korea continues its nuclear programme, that will push the region out of control. Japan will be next, then Taiwan, and so on. Russia and China are worried."

Earlier this week Losyukov expressed "cautious optimism," saying that "simply the agreement to hold a new round shows that encouraging signs have appeared regarding the movement of different participants' positions."

He repeated this Wednesday, adding that both North Korea and the United States, the two countries most at loggerheads, were "now coming out with the biggest optimism."

However he tempered this with warnings about the effect of negotiations dragging on for too long with too little result.

"I personally think that this (weapon) test very much complicated the situation in the region and set back the process of the six-sided talks. The result is that we lose time and the process of nuclearisation on the peninsula goes further."

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.