3RD LD: U.S. says row with N. Korea resolved, Pyongyang withholds judgment

BEIJING, March 19 Kyodo

(EDS: UPDATING WITH N. KOREA DELEGATE'S REMARKS, JAPANESE DELEGATE'S OPENING REMARKS)

The United States said Monday it has resolved a dispute with North Korea over Pyongyang-linked accounts that has held up progress in the six-party talks on North Korea's nuclear programs, but Pyongyang withheld its opinion on the deal as a fresh round of the talks got under way in Beijing, diplomatic sources said.

U.S. officials said hours before the resumption of the talks ultimately aimed at denuclearizing North Korea that it ended the row by agreeing on Pyongyang's proposal to transfer all the money in question held at a Macao-based bank to a North Korean account at a Chinese bank.

Daniel Glaser, U.S. deputy assistant Treasury secretary, told reporters North Korea promised the money will be used for the benefit of the North Korean people, including for humanitarian and educational purposes.

The roughly $25 million at Banco Delta Asia SARL was frozen after the United States designated the bank a primary money laundering concern in September 2005.

The row over the funds had stalled the six-party talks, with North Korea at one point refusing to return to the negotiating table, demanding the return of the money.

Under the agreement, the money will be transferred to an account held by North Korea's Foreign Trade Bank at the Bank of China in Beijing.

U.S. top nuclear negotiator Christopher Hill said in the morning the agreement paves the way for the multilateral nuclear talks to move forward.

''We feel this matter has been resolved, and now we can move on to the next problem (over the denuclearization of North Korea), of which there are many,'' Hill said.

But North Korean Vice Foreign Minister Kim Kye Gwan withheld judgment on the agreement in his opening remarks at the outset of the six-party talks, saying Pyongyang needs to see the funds released first.

''We must confirm whether all frozen funds will actually be released,'' Kim was quoted as saying by diplomatic sources with access to the meeting.

Earlier in the day, negotiators from Japan, Russia and South Korea welcomed the U.S.-North Korea accord, saying it smoothes the way for progress.

''I believe that an environment for moving forward has been produced,'' said Kenichiro Sasae, director general of the Japanese Foreign Ministry's Asian and Oceanian Affairs Bureau.

''This should be evaluated positively to a certain degree,'' he added. ''But what is important is that this is not the end. It is important to proceed toward denuclearization.''

Russian Deputy Foreign Minister Alexander Losyukov told reporters separately, ''This is an agreement that is truly needed'' for progress in the six-party talks.

''If this means that we can move forward, it is a welcome development,'' he said.

Chun Yung Woo, special representative for Korean Peninsula peace and security affairs at the South Korean Foreign Affairs and Trade Ministry, said the method of resolving the issue had been discussed between South Korea and the United States.

''It was solved in a way that had been discussed between South Korea and the United States, and I think it's good,'' Chun said.

In the nuclear talks that began Monday, the six countries were to go over progress made since Feb. 13, when they reached a deal on the initial measures for North Korea's denuclearization.

They will receive reports from five working groups under the framework that met this month.

In the February deal, North Korea agreed to shut down and seal facilities at its Yongbyon nuclear complex and to accept U.N. nuclear watchdog inspectors within 60 days.

Other parties will start providing Pyongyang with energy equivalent to 50,000 tons of heavy fuel oil within that time frame.

Chinese Vice Foreign Minister Wu Dawei, the chair of the multilateral nuclear talks, said the negotiators will also hold preliminary discussions on steps that should be taken during the second stage of denuclearization after the initial 60-day period.

The Feb. 13 agreement says that in the second stage, Pyongyang will provide a complete declaration of all of its nuclear programs and disable all existing nuclear facilities, in return for economic, energy and humanitarian aid up to the equivalent of 1 million tons of heavy fuel oil, including the initial shipment of 50,000 tons.

But the accord neither sets a timetable nor spells out concrete ways to implement those commitments, and such a plan needs to be worked out among the six parties.

Japan's Sasae said at the outset of the talks that Tokyo will try to swiftly implement the initial steps, adding that parties should start thinking about measures in the second stage, according to a summary of his opening remarks released by the Japanese Foreign Ministry.

''We believe that it is important that commitments for the 'next stage' will be implemented in a relatively short period of time,'' Sasae said.

China's Wu said in a statement carried live on television that the six-party talks still face ''a lot of difficulties and obstacles on the way ahead.''