More than six weeks have passed since the April 14 deadline for the North to close the Yongbyon reactor, the first step in a six-nation nuclear disarmament agreement reached in February.

A banking dispute with the US which is blocking the deal remains unresolved.

"Your side knows well why the implementation of the February 13 agreement is being delayed. The US is responsible for the delay, not our side," the North's chief delegate Kwon Ho-Ung told the South's team Wednesday morning.

His comments at the closed-door meeting were quoted by South Korean delegate Ko Gyoung-Bin, who briefed the media.

Ko said the North did not raise the rice issue during the morning session. But at a subsequent meeting it urged the South to "keep the promise regarding the rice shipment," according to a unification ministry spokesman quoted by Yonhap news agency.

"Because of the intervention of foreign powers, the implementation of what is agreed upon between the two Koreas is being suspended, and the inter-Korean relationship is being edged out by foreign powers," the North's Korean Central News Agency quoted Kwon as saying in Seoul.

The North -- which staged a short-range missile test last week -- also took the South to task for its joint military exercises with the US, and urged it to repeal its tough National Security Law and reject outside interference.

The South pressed for the gradual opening of cross-border railway services following a historic May 17 test run, and greater economic cooperation.

To ease military tensions it proposed the resumption of talks between defence ministers, after the first and only meeting almost seven years ago.

It called for practical steps to solve a dispute over prisoners of war and abductees, but the North reportedly made no specific response.

The South says the North has abducted 485 of its people since the end of their 1950-53 war and failed to send home 548 POWs. The North says no South Koreans are held against their will.

Relations worsened last year with the North's missile launches and nuclear test but improved after the February nuclear deal.

At the last ministerial round in March, the South agreed in principle to resume annual rice and fertiliser aid which the North badly needs. UN agencies say it faces a shortfall of one million tons of food this year, 20 percent of its needs.

But the South delayed the first shipment of rice, out of an annual total of 400,000 tons, until there is progress on the nuclear pact.

The North refuses to move until it receives 25 million dollars which had been frozen in a Macau bank under US-inspired sanctions.

The US said the accounts were unfrozen in March but the North has had problems finding a foreign bank to handle the transfer.

Seoul plans joint efforts with China, Japan and Russia to persuade its neighbour to make a start on nuclear disarmament. All are members of the six-nation negotiating process, along with the US and North Korea itself.

The South Korean, Japanese and Chinese foreign ministers, at talks on the southern island of Jeju Sunday, are expected to discuss the issue.

And Seoul's Foreign Minister Song Min-Soon will hold similar talks with his Russian counterpart Sergei Lavrov on Tuesday on the sidelines of the Asia Cooperation Dialogue forum, the foreign ministry said.

earlier related report
US envoy in Beijing to revive stalled NKorea nuke accord
Beijing (AFP) May 30 - The US envoy on the North Korean nuclear issue said here Wednesday he was working with China to solve a financial impasse that has stalled an accord to shut down Pyongyang's atomic programmes.

Assistant Secretary of State Christopher Hill met with Chinese negotiator Wu Dawei to discuss ways of resolving an impasse over the return of North Korean funds now in Macau's Banco Delta Asia (BDA).

"I had lengthy discussions with Wu Dawei on the way forward, in particular trying to compare notes about what to do about the issue (the release of funds) that continues to be a very difficult problem to overcome," said Hill.

North Korea promised to start shutting down its main nuclear reactor in exchange for fuel oil under the first stage of an accord reached in February at six-nation disarmament talks hosted by China.

But Pyongyang has refused to move until it recovers the roughly 25 million dollars that were frozen in the Macau bank by US financial sanctions.

The measures were imposed in 2005 amid allegations North Korea was using the bank to launder illicit funds and run counterfeiting.

Washington has since released the funds but North Korea is believed to be having difficulty finding a third-party financial institution to help transfer the funds amid concerns the money has now been tainted by the US accusations.

During high-level talks with South Korea in Seoul on Wednesday, the North blamed the United States for the delay.

"Your side knows well why the implementation of the February 13 agreement is being delayed. The US is responsible for the delay, not our side," chief delegate Kwon Ho-Ung told the South's team, according to the South Koreans.

Hill, however, insisted the impasse was a technical issue and the North was still committed to the process.

The US envoy, who is due to leave Beijing on Thursday, declined to say when he thought the matter would be resolved.

"We've been wrong so many times in terms of predicting when this should happen, but the positive side is the North Koreans are continuing to say they're prepared to do what they're supposed to do (under the nuclear accord)."

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